7 Ways to Reduce Business Expenditures

Lizzie Weakley

May 19, 2016

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Anyone who has ever run a business knows that keeping expenditures under control is a necessity for the very survival of any company. In business, profit is the name of the game, and profits can only be boosted by either increasing income or reducing expenses. This article will show you seven ways to cut your costs.

Pay Invoices Early

It is already a good habit to pay bills quickly after they are incurred. This helps to ensure that necessary invoices from important suppliers are paid with available revenue before the money has a chance to be spent elsewhere. It's also a good way to save money because many suppliers offer discount terms for paying an invoice within 10 days.

Cut Travel Expenses

For many companies, travel to conferences, trade shows and assorted other business dealings may be required. Depending on the size of your business and the frequency with which employees need to travel, your company may be able to negotiate reduced rates from hotel chains and car rental companies. There are corporate travel agents who can help a company find the best deal available.

Buy Office Equipment Second Hand

There are certain items that you may want to get new. These include technology items and other products where it will be a good idea to have a warranty. With regard to simpler items, however, there are opportunities to save money by buying used. It's pretty easy to evaluate whether a table or chair is fairly solid or not, and such items lend themselves to being purchased used with minimal risk.

Invest in CRM Software

One big way to save money in business is to cut duplicated effort and to more easily determine where employees need to spend their time. Time is extremely valuable and good, modern customer relationship management software also has calendar and task management capabilities. Having a central location where you can get a birds-eye view of every communication that has occurred with a given contact enables one to see where they are along the sales process and what is needed to get them the rest of the way from lead to customer. You don't want to be paying an employee to tell someone something that two other employees already told them because there's no central software for tracking these contacts.

Seek Professional Tax Advice

Taxes are a necessary consideration in every major decision a business owner makes. If you think hiring a tax professional or outsourcing to an accounting firm is expensive, then you may be shocked how expensive it is not to do so. The tax laws change so frequently that it is virtually impossible for someone who is running a business to keep up.

Go Paperless

Many local utilities as well as banks and credit card companies offer paperless options to their customers. They still have all the conveniences of checking on their accounts online, but now they don't have to collect mountains of paper in the process and feel good about helping the environment. Depending on the type of business, the cost of postage, paper and mailing supplies may not seem high, but it all adds up. Digital technology is so ubiquitous today that paperless solutions in the areas of invoicing, bill paying and others are readily available.

Use Outsourcing

Hiring employees is extremely expensive, especially with all the rules and regulations involved. Then there are the continuing expenses of training them and providing health care, insurance and any other benefits and expenses. Sometimes you have to hire in-house because you need someone to do a hands-on job long term for the business. Other positions, however, can be outsourced. Depending on the type of job, it can either be outsourced to a temporary agency that provides an employee on premises or you can completely outsource the work to another company. Call center solutions are a perfect example of this second type of outsourcing. They can reduce a company's operating costs by cutting the need for in-house staffing to answer customer calls during business hours, and they improve customer relations by providing a live person to talk to instead of a cold voice mail system after hours. In addition to answering and help desk services, there are U.S. companies that offer competitive rates on outbound services such as telemarketing and conducting surveys.

View These Suggestions Only as a Beginning

Keeping expenses under control is a critical part of managing any business. The few examples above provide a starting point and can be complemented with numerous other strategies to help you keep more of the money you have coming in from going right back out again.