Even if you have a specialised finance staff that knows the cost accounting process, determining the most efficient ways to cut costs can be difficult. One of the greatest ways to maintain your business in shape so it can operate effectively in a range of economic conditions is to keep costs under control.
1. Hire the right people
One of the most essential techniques to control company expenses is to take a cautious approach to all stages of the employment process, from recruiting through onboarding. Bad hiring are costly, and an employee who can’t keep up with job expectations costs a company more than some may believe. Managers spend more than 10 hours out of every 40-hour workweek counselling failing staff, according to Robert Half study.
Finance executives also admitted that recruiting errors had a detrimental impact on team morale. Poor recruiting decisions, according to 91 percent of the CFOs polled, have a negative impact on morale at their firms.
2. Negotiate annual contracts
If your company is like most others these days, you deal with a number of different third-party providers. Contracts with them are an excellent location to search for long-term cost-cutting strategies. Multi-year contracts benefit the supplier, therefore if you can reopen the contracts to yearly bidding, you may be able to reduce your cost of products.
3. Build strong relationships with suppliers
Another key step in cost reduction is to keep track of your spending. In the long term, deferring payments until the last minute or after the due date will only increase expenditures. These tactics are also likely to wreak havoc on your supplier relationships.
Rather, the ideal strategy is to pay your bills as soon as possible. Another advantage: companies with strong connections with their suppliers may have more bargaining power when it comes time to negotiate.
4. Use cloud computing as a cost control
Technology has progressed to the point where your staff can be just as productive — if not more so — by accessing data and using applications via cloud-based servers. Cloud finance solutions are quickly becoming methods for companies to improve productivity and save overhead expenses as more individuals telecommute and interact with colleagues in other areas. Financial Software-as-a-Service programmes can provide businesses more flexibility by providing round-the-clock access to company data in the cloud.
Do you want to make a difference in your company’s bottom line? Cost control, whether via recruiting, supplier contracts and partnerships, or cloud technologies, may have a long-term influence on your earnings and position your business for success.
5. Digitize invoice retrieval
When a member of the team makes a purchase, they must save the receipt. This is a very straightforward notion, yet it causes infinite headaches for finance and accounting departments.
Because, no matter how careful your staff are, they will occasionally forget or lose receipts. And this entails a lot of back-and-forth with the finance staff in order to explain themselves and locate those payment evidence.
You should digitize receipt collection to prevent spending time collecting invoices and to ensure that you receive all of them. Tax agencies all across the globe now accept e-receipts.
6. Digitize and automate your processes
Which of your procedures takes the longest and produces the least results? Determine who they are, then go digital and dematerialize. Instead, concentrate on effective solutions for invoice retrieval, purchase request management, and even real-time expenditure processing.
Automating and digitizing your processes will improve your outcomes, enabling your team to work more quickly, and free up time for other essential (and less time-consuming!) activities