Small cost-effective changes can have a large impact on company success. Even the smallest reduction in expenses will increase profitability, free up capital for growth, and improve your bottom line.
With these 4 tips, you can easily reduce expenses without reducing quality.
Make it a Team Effort
Meet with your staff to discuss the importance of reducing costs, and make sure they understand how they could benefit. When your team is invested in the outcome, you might be surprised with the ideas they will generate.
One employee suggested to his company should stop using disposable cups for coffee. Instead, each employee would bring in a coffee mug from home. One simple change saved he company $100 a month.
Printing can also become an expensive area for some companies. Reduce printing costs by setting the printer to automatically print and copy double-sided by default. Encourage employees to use PDFs or tablets whenever possible.
Green the Office
The next time your light bulbs run out, replace them with LED lights. They reduce power usage by as much as 80% and can last up to 10 years. This will substantially reduce replacement costs and utilities expense.
The hibernation feature on your computers and laptops presents another quick change to save energy cost. Set computers to automatically hibernate after working hours or after 15 minutes of idle use. Allowing your computers to run screensavers for an extended time is inefficient and costly.
The recurring cost of an office space is usually one of the most prominent lines on an income statement. Optimize your space by centralizing or consolidating the various functions of your business. Use a meeting room that also functions as a break room. Move copy and fax machines to a storage room.
You might find that you need less space than you thought. If you have extra space that is under-utilized, rent out an empty desk or office to offset your monthly expense. And yes, there is a market for single desk leases!
Write it Off
According to a FreeAgent/YouGov survey, nearly one in every five small-business owners do not claim any expense less than $10. You might be surprised how quickly $5 expenses could add up to significant tax savings. Even though it might seem tedious, track and account for the most minor of these expenses.
Beyond the small expenses, the same survey discovered 21% of small-business owners claim less than half of their allowable business expenses. Often, these expenses are not claimed because the owner is unaware or unsure of the legitimacy of a claim. These situations are where a strong relationship with your CPA is incredibly valuable.
Your trusted CPA can help advise you on how to maximize your deductions to minimize your overall tax burden. When you reduce the amount of money you are forced to pay Uncle Sam, you open the possibilities for increasing the bottom line.