There are a variety of ways to better manage business expenses and Businessweek recently did an article on the subject. Here are the basic concepts:
“Small changes to reduce expenses and improve profitability can help prevent more painful cuts later on. Here are 10 ways your company can trim costs without touching your core business, with links to in-depth articles on each technique.”
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Reduce Energy Use – Switch to compact fluorescent lighting to save electricity. Cut your heating bill with better insulation and windows. On the road, slow down and use GPS systems to boost mileage and reduce fuel costs.
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Telecommute – Send some or all of your staff to work from home to save on the cost of office space. You’ll also save workers money and time commuting.
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Pay Invoices Early – Take advantage of discounts suppliers offer for paying invoices early. Often trade terms offer 2% off for payment within 10 days.
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Curb Travel Expenses – Cut business trips that don’t generate revenue, such as conferences, and opt for less expensive flights and hotels on essential trips.
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Find Cheaper Space – Get bargains on new office space or renegotiate better terms on your current lease now that real estate markets in many areas are tilting in tenants’ favor.
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Buy Secondhand – Find office equipment and furniture at a fraction of the retail cost as other businesses liquidate or unload their assets.
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Go the Barter Route – Trade goods and services with other businesses to reduce cash expenditures.
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Manage Your Inventory – Keep only supplies you need in stock to reduce overhead.
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Cut Your Tax Bill – Take advantage of tax deductions for new equipment purchases, hybrid cars, and other expenditures.
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Audit Fixed Assets – Clear your books of assets you no longer have to reduce your insurance bills and taxes.
All of these ways of cutting business expenses will add profits to the bottom line. Unlike increasing sales which has costs of the product, commissions, etc. which come out; cutting expenses is pure profit. Even though the first thing on the list has to do with energy expenses, it fails to mention how savings can be achieved by finding better energy rates. For the complete article, please click here.
