Account for All the Company Expenditure
Do you know where all your money goes to? Before cutting company expenses, first, understand the financial gaps within. Account for all the costs and critically look at each expense to know whether it is necessary or needs adjustments.
The exercise enables you to discover some money leaks such as subscriptions you no longer need, duplicated or overpaid services. For instance, you might find that you’re paying a lot of money to fuel the company’s fleet and might need to think of other options such as fleet cards that enable you to control, regulate or keep fuel use in check.
Check Whether the Premises is Fully Utilized
You might be paying a lot of money for an office you don’t fully utilize. Critically look at the space you have. Do you need all of it? However, don’t squeeze your workforce into a small space as it’s risky with the Covid 19 pandemic but make sure it’s well utilized. If not, think of leasing out the extra space or moving into a smaller unit.
If you feel that you’re paying a lot of money for the office upkeep, create a strategy that enables the workforce to work remotely then move into a smaller office. You can have the employees report to the office on schedule.
Another advantage of working from home is that you’ll reduce energy costs, fuel consumption, and other expenses that pile up when everyone is at the office, such as paper costs.
Reduce Inventory Levels
Although you should make all your purchases in bulk as it’s cheaper, don’t keep more than you need for a month or two because you’ll also need more storage space. A large inventory uses up your profits and holds your money, paralyzing other processes.
Instead of keeping a large inventory, invest in inventory management software that enables you to track and retain the correct numbers. Also, when making purchases, seek the best deals but don’t compromise quality.
Improve Energy Efficiency
Production processes, appliances, and equipment use up a lot of energy, and when not controlled, you’ll be paying a lot of money towards utility bills. Have an energy audit to pinpoint possible issues.
Ensure the equipment used meets high-efficiency standards and is well maintained. Also, install energy-saving lighting, switch off all appliances when not used, and opt for recyclable items such as cups and water glasses.
Additionally, enlighten your employees on the need to conserve energy by switching off appliances when not in use, using natural light when applicable, and keeping paper use minimal.
To encourage the employees, digitize your office, making it easier to abandon manual for digital processors and invest in smart devices such as automatic lights and water faucets. Constantly check your expenses to keep on adjusting accordingly.