How to Cut and Control Expenses By: David Kirkup, B2B CFO
It's clearly difficult to increase revenue today, but cutting costs can be just as, or even more effective than attempting to grow the company. With a 10% net margin - if you can reduce costs by $10,000 - that's like increasing revenue $100,000. Here are twelve ideas you can implement today.
Cost containment has never been more important than in today’s business climate of slowing sales and accelerating costs. The most important factor in a company’s cost minimization is in the business’ corporate culture. Companies need to identify and manage their corporate culture to include cost minimization. Policies are the bridge from corporate culture to corporate actions. It is critical that management ‘walk the talk” because employees key off what they see management doing. Cost containment starts with the corporate culture which shapes the policies. It is management’s responsibility to clearly communicate the culture and policies, and then hold everyone, including themselves, accountable.
To remain objective, employees must maintain a degree of separation from vendor account reps. Often times personal relationships make it difficult to make the hard decisions and end up costing money. Examples are given which illuminate problems that can arise when friendships with vendor reps lead to higher costs. Companies should maintain good relationships with their vendors but implement and enforce policies that prevent personal relationships affecting decisions.
In today’s business climate the cost of electronic payment acceptance is a significant cost line item for many businesses. Not all payment methods cost the same. The payment alternatives are reviewed and ranked by relative cost. Businesses can reduce their cost for accepting electronic payments by actively managing their payment acceptance and influencing the payment method chosen by the purchasers.
Although legal costs are not an area that we work, this article written by John Stephens, Principal at Blantry Ltd should be of interest to those wanting to reduce their legal costs.
