The new year is a time of celebration for team and business success, reflection on the business and processes and planning to start 2014 off on the right foot.
Now is a great time to really dig into business expenditures to see where you can save both time and money for your company. Each time we have gone through a review for our own business, we have discovered areas where we can truly cut back and save. Even small expenses like office supplies, when reviewed and reduced, can truly add up.
I’ve outlined 5 top expenditures to review below to help you start to tackle some business savings in 2014.
Review of Business Expenditures
Let’s dive in! One area that is often overlooked is utilities. An audit of utilities for your small business or large business – telecom, freight and property taxes – can potentially save a large percentage of current operation expenditures. I would recommend you use an outside contractor that specializes in utility auditing. They have the experience necessary to find hidden costs and complicated billing codes. Utility auditors will look for incorrect meter readings, redundant billing charges, line charge evaluations and billing or accounting errors. Look for someone who charges a low percentage as they typically receive compensation from the utility provider.
2) Office Supplies
This line item may almost seem like a no brainer; however, reviewing monthly office supply expenses is a great way to cut immediate overages in your budget. Many companies now offer business specific accounts, giving you points for purchases and discounts on re-orders for basic things you use every day like paper, pens, staples, file folders, etc. Review what is being ordered and determine if it is really needed.
For example, one of our customers reviewed the line item they were spending on disposable plates, napkins, serving ware and cups and was shocked at the waste and expense. Instead, they asked staff to bring in their own reusable cups and purchased office dishes and saved exponentially. Plus, their team implemented a recycling program to better serve the environment.
3) Business Travel
This line item can quickly get out of hand, especially if staff is responsible for finding their own hotels, flights and car rentals. I suggest having one individual in the office manage all travel and/or find a travel agent that can help. It will save you time and money in the long run as they know how to look for the best deals.
Top mistakes that are often made are booking too close to the travel date. Have your team plan ahead and book flights and hotels as far out as possible. Review your per diem and set guidelines for staff so they know what their budget is and what can be expensed prior to the travel date.
Phones, phone service, email providers, website hosting, social media monitoring, and CRM systems – they can all add up. When is the last time you sat and reviewed each line item to ensure a) you still need the service b) that you are getting the best deal c) that you still need the amount of coverage/licenses that you are paying for. It’s important to do a review of these renewable charges each quarter to see where you can save.
Example: one huge office savings can be moving to Google for email and documentation sharing. Email systems and storage are often overlooked and can be a great place to start when you want to save.
5) Office Space
I saved this for #5 as this is one of the biggest areas where you can save. If your commercial lease agreement is up for renewal contact a commercial real estate advisor to review your agreement and ensure that you are best served either staying or moving to a new location. They can help dig into line items on the commercial lease agreement that you may not know to look for and provide you with the latest lease rates and availability in the areas you are considering moving to.
Another key thing to consider is the movement to remote employees. Dell plans to expand its telecommuting plan in a big way by 2020. They saved $14,000 million in 2012 by making these changes. Having an office space for meetings and/or client visits may be all you need with the right telecommuting set-up. If you don’t know much about the telecommuting push, you don’t have to look far for great resources. Simply search for telecommuting tips for business and you’ll have access to hundreds of articles on why to consider it, how to do it and even tools needed to get started.
These 5 tips to save on business expenses are just the beginning. Once you get into the review, you’ll find other business expense categories that you may not have even had on your radar.
Take the time to set up a great template for your business expense categories to make it easier for you to review each quarter. Once the system is in place for your small business or your ever expanding large business, it will be easy to review and see the changes to your bottom line.
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