New Energy Articles Blog

One of the primary reasons for businesses going bankrupt is that they are not good at controlling their finances. As costs are not properly controlled, cash flow inevitably suffers and, without enough money in the bank, the business soon fails. Therefore, it’s no surprise, especially in the current economic climate, that lots of organizations are looking for practical ways that they can reduce their expenditure. There are a number ways to do that, with these being a good place to start:

Utilities - Too many companies never compare their gas and electricity providers. This means missing out on potentially huge savings. Don’t think that it will be a pain and time consuming to change over, because it really it isn’t. You should go through a broker as they have access to a wider range of tariffs than you would otherwise be able to access.

Outsourcing - Outsourcing non-critical business functions can result in substantial savings. Finance, IT and HR are the main areas that you can probably save on. Depending on your industry though, you also want to consider outsourcing customer service, distribution or marketing. Outsourcing overseas, such as to India or the Philippines, should not be dismissed.

Banking - It may sound obvious, but some businesses fail to review their bank charges. These are usually variable charges that banks can use to gain profit from your business dealings. Some things to look for are interest rates and if any accounts are received in credit. It may also benefit your business to pay for a higher monthly fee for a higher level of online services as it may be cheaper than the usual transactional fees.

Business Rates - Assuming that rates don’t change is a major mistake. In fact, they can be challenged every five years either by yourself or with the assistance of a consultant. Be sure the consultant doesn’t charge a fee up front and that any charge is based only on savings.

Telecoms - Businesses have plenty of competition since the deregulation of the telecom market, and those with large providers can save up to 10% off line rental. Even more can be saved on call charges. It is important to compare rates and be sure that the contract length is suitable to your needs.

Office Stationery - Combining suppliers and invoices not only enables savings by purchasing from one place, it also increases your ability to negotiate. This ability increases if you are part of a buying group. By monitoring your own usage and limiting the number of authorized reordering personnel, you can reduce costs. Using your own products can lead to 25% savings.

Next : Cost Reduction

Tags: Business, cost reduction, management, small business

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