A business, be it large or small, cost management is the key for long-term growth and sustainability. If you think your expenses are running out of control, here are 20 useful tips:
- Use the right software: Tracking expenses becomes easy with the right software. But do make sure the system is compatible with your accounting team’s software.
- Be proactive: As soon as an expenditure occurs, make it a point to feed it into the system. Procrastinating will only add to delays and inaccuracies later.
- Use the cloud: Cloud computing allows you to amplify your digital assets while reducing your costs. Figure out the right vendor and give it a try.
- Go mobile: Ensure that the tracking system allows you to work through mobile devices, as this will increase flexibility and accuracy.
- Improve collections: Make sure that you are able to collect the receivables on time for the invoices raised. If required have resources dedicated to work on the same.
- Improve cash flow: No matter how much spare funds you have, the most important factor is cash flows. If cash flow is not up to the mark, you need to do some thinking.
- Forecast and plan: Use cloud-based solutions to forecast your expenses and plan for the future. Technologies like Big Data make it easy.
- Monitor regularly: It’s all fine to put financial policies in place, but it’s also important to review them regularly to gauge their effectiveness.
- Equipment upgrade: Shifting to latest hardware technologies allows you to save on energy costs.
- Alternative software: If your software costs are shooting through the roof, look for open source alternatives for popular software.
- Be flexible: A good way to reduce fixed costs is be flexible and allow employees to work remotely, for example use VoIP instead of landline and so on. This might be a bit inconvenient but can bring down costs drastically.
- Plan for contingencies: Planning for unforeseen events in advance. Data loss, for example—helps to reduce costs and inefficiency associated with recovery efforts.
- Outsource: Specialized services such as HR operations, technology, etc., can be outsourced to improve the financials as well as efficiency.
- Rethink marketing: Thanks to social media, marketing efforts need not be expensive anymore. Get everyone together and rethink how you can do better in a smaller budget.
- Delay incentives: While incentives are important, you also need to manage them efficiently in the big picture. Plan them wisely to reduce the burden on future earnings.
- Co-working: Small businesses can easily save a lot by shifting to a co-working model.
- Fewer meetings: Meetings eat up a lot of time and are usually unproductive. Instead, devise alternative ways to improve communication.
- Rethink facilities: Don’t go for fancy stationery, paper cups, etc., when something less flashy but more affordable will do.
- Reduce printing: Make it a point to work on digital copies as much as possible. Printed material is costly as well as cumbersome.
- Clear objectives: Make sure everyone has very clear objectives for the day, week, month, etc. Implement five-minute “flash” meetings across teams.
Curtailing costs should be the number one priority of any business. Use these tips to improve your finances.