6 Strategies to Effectively Reduce Business Expenses
Entrepreneurs must manage cash flow. The best way to accomplish this task is through managing expenditures. However, you should not reduce quality to control expenses.
The problem with small businesses is that owners often turn to unskilled bookkeepers who provide poor advice on cutting back on spending. Here are seven strategies from competent accountants that can help small businesses bring down their payables.
1. Transition to Being Paperless
In this day and age, paper is more expensive than money. For example, think about the amount of paper and ink used by a printer compared to the cost of a piece of paper at a store. How about toner cartridges? They are far more expensive than the paper they use.
Being paperless allows you to reduce spending. This is especially true for small businesses, which don’t need to print out copies of documents. Instead, use Microsoft’s OneDrive, Google’s Drive, or SharePoint to store and share documents.
2. Cut Down Your Marketing Budget
The truth is that most marketing campaigns are ineffective. Therefore, it’s better to find a marketing campaign that works and stick with it.
Small businesses can always create their own marketing campaigns by using social media to promote their products or services. However, it could be better to outsource the marketing campaign to someone who has the expertise to create a work campaign.
3. Consolidate Your Accounts
In our experience, small business owners have numerous accounts that require money. However, the only accounts that really matter are checking and savings. Most other accounts such as credit cards and lines of credit should be closed.
The best practice is to have one checking account, one credit card, and one line of credit. If you have several bank accounts and credit cards, ask yourself how many of these accounts you need.
4. Reduce Utility Costs
Utility costs can be cut by 50 per cent simply by being more efficient. Consider investing in energy-efficient appliances and light bulbs, reducing 20 per cent or more electricity costs.
Also, find ways to reduce the amount of electricity and water your business uses. For example, you could consider using solar power or a well to get water.
5. Outsource Time-Consuming Tasks
With a small business, you have to do everything yourself. However, there are things that you can outsource to save time. For example, you could outsource IT support to someone experienced in managing and maintaining IT systems.
You can also outsource accounting functions to someone qualified to do your bookkeeping or payroll. You also could outsource tasks such as cleaning, lawn care, and lawn mowing to someone who has the expertise to perform those tasks.
6. Use Free Online Tools to Reduce Costs
Restrictions on office space, equipment, and tools are the main reasons why small businesses cannot execute tasks as effectively as they want to. However, this is not the case with tools such as Google Drive, OneNote, and Microsoft Office 365.
Google Drive, OneNote, and Microsoft Office are all free tools that can help you improve the efficiency of your business. For example, you could use Google Drive to store documents, which means you don’t have to pay for a storage solution.
Small businesses have to manage cash flow. To do this, it’s essential to find ways to reduce spending. The strategies provided in this article are easy to implement and could save small businesses thousands of dollars a year.
At New Wave Accounting, we provide end-to-end accounting and bookkeeping services that help scale and grow businesses. We understand small businesses and have worked with over 600 businesses in several industries. This has allowed our Gold Coast Accountants to understand each industry and create tailored solutions for our clients. So, if you’re looking for a business accountant on the Gold Coast, we’re here to help! Get in touch with us today!