Due to shifting fuel rates, rising prices, varying labor rates, global competition, and soaring health insurance costs, cost control has become a moving target for most companies. Some expenses might seem under control, and you may even think that you are thriving. But, as long as another area of your company is experiencing cost overruns, maintaining profitability is a battle that is difficult to win. Competing in today’s market is bound to be an uphill task! A cost control plan is required to lower expenses in every area of the business. While these activities may vary by the type of business, the concept of cost control remains the same. Here are some of the ways different businesses can control costs and increase profits:
Utilize technology to improve productivity
The advancement of technology has made it possible for employees to be more productive than ever by using cloud-based servers and software to access data. Cloud computing technology is quickly becoming one of the unrivaled ways for companies to reduce overhead costs and improve efficiency. The cloud offers uninterrupted access to business information, and Financial Software Service gives organizations greater flexibility. Tools such as project management and online invoicing can help your business save a lot of money.
Consider hiring contract employees or freelancers
Certain areas of your business, including manufacturing, accounting, transportation, and Human Resource functions can be outsourced, which will ultimately reduce the cost of overhead and space. Remember, hiring a full-time staff comes with other costs such as health insurance; which will slowly eat into your profits.
Renew all your contracts annually
If you are like most US business owners, you probably have multiple year contracts that you assume will result in reduced costs. While that may sometimes be true, it is not always the case. A smart company owner will not have a contract that exceeds one year. This way, you are able to have renewal discussions or even annual bidding with current suppliers, which may result in reduced costs. Multi-year contracts will most of the time favor the vendor. Having yearly contracts may seem tedious, but it pays out eventually.
Reduce paper use
Just like cutting down on water and energy usage, reducing paper wastage is good for a company’s bottom line, as well as the environment. Some of the ways to do this include:
- Reusing waste for notes or scratch
- Shrinking fonts and tightening margins on printed reports
- Utilizing secure electronic file exchange systems such as Delivered Secure, instead of the traditional courier services
- If practically and legally possible, taking your organization’s name off direct mailing list
- You can also go green by recycling printer cartridges and paper
Reduce phone bills
Use Google Chat, Skype, or any other chat service to reach your employees. You can also opt for web conferencing techniques such as GoToMeeting to make a presentation or connect with clients online.
Even with a committed finance team that understands the cost accounting procedure, the actual identification of the most effective methods to reduce expenses can be challenging. The above strategies are excellent first steps toward realizing cost control in your business.
Rowan Lee is a smart working restaurant owner who likes to think of himself as a food connoisseur in his free time. Rowan has enjoyed using his food experience to share with others and to help improve his own business. One of the best improvements he made to his restaurant was with www.trycake.com.