At some point, every business makes needless expenditures that sap valuable time and resources from other projects, and damage the bottom line. These excessive costs—which also detract from funding new customer acquisitions or product upgrades—often perpetuate themselves, making it very difficult to pull the plug farther down the road.
But if you feel the time has come to crack down on unnecessary spending, here are actions worth taking:
Improve the process of tracking expenditures.
Businesses that fail to monitor spending often later find areas of waste and overspending that could have been avoided. With a plethora of cloud-based expense tracking apps to choose from, there are plenty of opportunities to strengthen existing processes and eliminate areas of excess spending as soon as possible.
Crackdown on paper costs.
If your business still spends money on paper products, it’s well past time to shift to digital technology. Virtually overnight, you can cut printing and storage costs dramatically. Scan important documents and email them to clients and suppliers, rather than incurring costs related to personal deliveries.
Eliminate unproductive meetings.
Most businesses are susceptible to meetings “that waste everyone’s time and lack any viable ROI.” Think of the money you can save by holding only productive, actionable meetings. This frees up your team to engage in other, more focused (and often revenue-generating) activities.
Analyse the purpose behind every business trip.
Back in the day, it was considered necessary to travel nationally or internationally in order to maintain solid working relationships with clients. While this remains true to some extent, in fact, many businesses no longer feel compelled to show up in person at every industry conference, trade show, or overnight client presentation. Digital and video technology make steady contact easier than ever—often at a fraction of the cost.
Hone your negotiating skills.
For all the needs of your workplace—from leased office space to purchasing supplies and equipment—it’s vital you get the most for your money. If your negotiating skills aren’t up to par, it’s possible you’re paying more to vendors for their products and services than is absolutely necessary.
Be on the lookout for ways to negotiate volume discounts, for example. Armed with information about much you regularly spend with current vendors—and what competing vendors might charge for similar products and services—you can negotiate ways of “aggregating purchases to achieve savings in volume.”
Explore options to outsource technology functions.
Businesses can opt to purchase the most costly, up-to-date equipment to support their operations, but they don’t have to. Technology and software aren’t cheap and often entails further expenses in terms of technical support personnel and/or server administrators. Outsourcing IT services offers potentially significant financial and operational advantages, such as:
- Decreased staffing costsAccess to data applications without paying licence expenses
- Opportunities to focus the internal IT staff on large infrastructure initiatives, rather than day-to-day desktop glitches
- No need to constantly update IT equipment, a responsibility assumed by the third-party service provider
Outsourcing IT functions isn’t the perfect choice for every organisation, but it’s a flexible, cost-effective option worth considering.
Encourage submission of cost-saving ideas from your employees.
When leadership makes clear how important it is to reduce unnecessary spending—in order to continue making a profit and paying the workforce—employees feel incentivised to look for cost-cutting measures on their own. With your encouragement, they may come up with creative suggestions to consolidate current expenditures and other money-saving ideas well worth implementing. It’s up to you to communicate this organisation-wide priority and reward the best cost-saving suggestions.