Six changes you can make to reduce costs and increase profit
Running a business can be costly. From paying lots of staff over multiple departments to ensuring that you have the technology you need to function, it can all add up. Keeping your costs to a minimum and regularly reviewing your outgoings can make a massive impact on your bottom line. Even the smallest of changes might be worthwhile in the long run. Here are six changes you can make to reduce your running costs and increase profit.
Heating an office can, over a year, equate to a fairly hefty utility bill, so reducing your costs, where possible, should make a difference. Industrial heating oil is cheaper than regular heating oil as it is zero VAT rated. Unlike red dye diesel, it can also be used all year round, so buying in bulk can also bring the price down. Find out what you are paying now and see whether this would be more a cost-effective fuel.
2. Lighting and electricity
While there will be an initial outlay to switch, motion sensor lighting is an excellent idea, particularly in larger offices. This ensures that lights will only come in areas that are occupied. Switching to LED bulbs can also make a difference long term. They last far longer and use less electricity.
Office and I.T. equipment being switched on all day every day can inflate your electricity bills. Consider implementing a switch-off policy in your office where, at the close of play every night, computers, photocopiers, and such like are switched off. This will not merely keep your money, but it is far better for the environment.
3. Time tracking
If you don’t already use time tracking software, it might be worth looking in to – particularly if you pay your staff hourly. Time tracking allows you to quickly and easily approve employee working hours.
They enter the details from their mobile phone via a timesheet app, which you can then review and approve. Not only is this method quicker for your payroll staff, but it will also ensure that you aren’t paying someone for hours that haven’t been worked.
It’s a useful tool to check how long a project is taking in terms of person-hours too, and if your clients are billed by the hour, it will ensure that you are not undercharging them when it comes to invoicing.
You can also review stats relating to past or ongoing projects, and use this data when forecasting time and projected costs for future projects. Time tracking can save you money in many different ways as well as making procedures more streamlined.
3. Go paperless
Going paperless is another wise move in terms of the environment. It can also save you a lot of time and make your company run far more efficiently. Please have a look and see how much money you spent last year on paper and printer ink, and calculate how much time your staff spent sorting their way through reams of filing.
Going paperless and using the likes of Cloud storage instead, will reduce all of those mentioned above and make your filing systems far more efficient. If you have staff who work remotely from time to time, they can access the information they require regardless of where they are. If the critical documents they need are stored in paper form in a filing cabinet that is miles away, it’s not particularly ideal.
4. Monitor purchases
It’s good to have policies in place to ensure that any purchases are approved. Whether it’s stationery or additional I.T. equipment, someone should be signing them off. Stationery is one of the worst causes of unnecessary and wasteful spending in offices. Granted, the odd packet of sticky notes isn’t going to cause any issue, but over time, if orders aren’t being monitored, it could get out of control.
Have you considered that you might be employing too many staff, or perhaps you don’t have sufficient staffing levels for the size of your business? Both could be losing you money. Take some time to find out whether cutbacks can be made by re-allocating duties to staff who aren’t quite as busy as they could be.
On the flip side, find out if existing staff have time to get through their day to day duties efficiently. If staff are overworked, it could affect overall productivity. Employing additional staff could mean that you can take on extra work resulting in other income. It’s crucial to analyze staffing levels regularly and make changes as and when needed.