Lowering Expenses and Expenditure

Given the recession, it has never been more important for businesses of any size to be lean and efficient. Surprisingly, however, many companies still drag their cash flow downwards through unnecessary expenditure. By following the handy hints below, you can avoid being one of them.

Start monitoring your expenses

It’s clearly not possible to reduce your expenditure if you don’t know where your money is going. Make sure that you keep an up to date and accurate budget and cash flow forecast, and check it often. One of the biggest mistakes made in this area is only to include the big ticket items of expenditure in such budgets. Make sure you input everything. You may be surprised to see what adds up to a significant expense over the year.

Cut out unnecessary items

This may sound obvious, but it is astonishing how many businesses spend significant amounts of money on items which simply aren’t needed. While employee benefits such as drinks machines and discounts may be well worth the investment, you might find that there are other perks which are just as valued and which don’t cost your business any money. Be ruthless in focusing your cash expenditure only on items which can help to achieve your primary goal.

Buy in bulk

There are some items which you are always going to need. If you are monitoring your use of them, however, there is no reason for you not to buy them in bulk. No business which is substantially paper based, for example, should be buying stationery in a piecemeal fashion. Establish how much you use over a quarter, and buy in bulk for at least that duration. Of course, you shouldn’t buy in bulk for items you only use on occasion. It is not efficient to be left with vast amounts of an item you will take years to use up.

Go green

You can help the environment and cut your costs at the same time, as long as you have the cash reserves to make an initial investment. Almost all of your bills can be reduced through the use of low energy appliances, insulation and renewables, but they do often cost more to begin with. Visit the Energy Saving Trust to see how much you could save by going green.

Some things in life are free

At least a few of your one-off infrastructure investments can be eliminated entirely. For example, do you need to use expensive software, if the same functions are available via the open source community of programmers? Even high quality office furniture can often be claimed for free from sites such as Freecycle.

Sensible finance

Sometimes, you will need to top up your cash flow. Make sure, however, that you get the best deal on credit, and aren’t spending money on high interest rates and unnecessary service charges. Being clever about your bridging finance can save large sums and still provide the cash flow your business needs

We can offer you financial solutions to help keep your cashflow healthy. Request a quote now to find out how much invoice finance can save you.

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