Limiting your expense list can save your business much-needed funds. And it’s easier than you think – you just need to know what tools to use
1. Accurate lists of expenses are your first port of call. You need to map out where your money is being spent before you know where you can save.
2. Expense controls should be limited to a number of individuals. Don’t give everyone the signing powers to spend money. Find one person per department who knows what they are doing and put them in place to sign-off on approved expenses.
3. Set control measures in place that will signal problems. This includes bank payment limits that will notify the business owner if someone tries to overspend.
4. Hiring the right people for the job will make your life easier as a business owner. If an acquisitions manager is out of touch with the industry, they might be spending double what they would at another supplier. It’s up to these people to source the best pricing for your business.
5. Identifying new sources of supply can help you to negotiate with existing suppliers. Yes, we’re almost suggesting threatening to take your business somewhere else – you’ll be surprised at how far suppliers are willing to bend to keep your business.
6. Outsourcing can be a good idea in certain situations. If, for example, you need 100 items branded and you don’t have the equipment, bring in a suitable company who will be able to perform this function.
7. Outsourcing can be a bad idea in certain situations, too. If you’re going to be performing a process infinitely and you’re outsourcing it as you don’t have the skills or equipment necessary, calculate how much it would cost to replace the outsourcing with training and buying the machinery. You might save an immense amount of money in the long run by spending a bit more now.
8. Control mechanisms such as security video cameras, stock control and body searches are tools that can assist to identify and neutralise theft in the workplace. And don’t kid yourself that it doesn’t happen, because it does.
9. It’s important to identify items that are constantly needed and buy them in bulk. Rather take up more space in the storeroom with a couple of extra boxes than pay for petrol to run to the store every third day, pay for parking and still not be paying for discounted deals.
10. Be wise with your policies, including banking setups. You might find that you’ve chosen an expensive banking plan when a cheaper one would have worked as well, if not better. Adapt and adjust your current policies and you could find your business saving lots of unnecessary expenses.
Expenses are an everyday part of business. However, they can get out of hand and it’s important for a business to be able to rein them in and control the expenses. You just need to know how.
