Post by account_disabled on Mar 7, 2024 14:43:43 GMT 8
If a company does not manage its expenses well, its profit margin may decrease, causing the business to lose efficiency and sustainability. When this happens, you need to start cutting costs to avoid more drastic measures. To help reduce your organization's expenses, we've put together 10 practical tips to get your finances back on track. Check out: 1 - Carry out a periodic analysis of your costs In their desire to reduce expenses, it is common for companies to start making cuts without criteria and, in the process, end up eliminating important resources for the business. In order for this situation to be avoided, meetings must be held — at least once a month — between the company's management and finance department . Make a list of all the company's costs and keep a history of expenses. This way, it is possible to identify superfluous expenses, which do not impact productivity and quality of service. 2 - Involve your team to optimize your spending There is no way to reduce expenses without employee collaboration . Therefore, it is necessary to invest in internal communication and in setting goals for employees, using the savings made to reward your team when the objectives are achieved.
In this context, simple actions such as making better use of natural light, changing lamps, appliances and luminaires for more economical models and replacing paper documents with digital documents can generate large savings and help reduce expenses. 3 - Adopt the time bank A good alternative to reducing expenses with work teams is to adopt time banking. The company saves on overtime, while the employee recovers time worked overtime by taking time off, amending holidays or extending vacations. However, so that this measure does not cause legal and labor problems, the employee must receive this compensation British Student Phone Number List the current year. Otherwise, you will need to pay him for those extra hours. 4 - Put the dismissal costs on paper To cut costs, laying off employees may not be a viable alternative. As much as it may seem good to reduce your payroll, before making this decision you need to consider the costs of terminating contracts. Before dismissing, also take into account the time it will take for a new employee to reach the level of experience and quality of those who left.
Renegotiate debts and bank fees Renegotiating your debts with creditors can be a great alternative to getting a lower interest rate and minimizing damage. However, it is also necessary to calculate whether the company will be financially able to pay this debt under the negotiated terms, so that it does not lose credibility in the market. It is also important to manage bank fees, as they can reach up to 1% of the company's revenue. Therefore, negotiate better rates with your bank, but remember: to achieve this reduction it is essential to be up to date with payments and have good cash control . 6 - Carry out a cash flow analysis Analyze your cash flow over the last 12 months and detect which ones saw a drop in sales and receipts. With this information, you can negotiate better payment terms to support the slow months without paying higher interest, increasing your profit margin. 7 - Improve supplier management Some companies spend up to 50% of their revenue on debts owed to their suppliers . To reduce these costs, your organization must establish better partnerships with suppliers or even look for other producers who offer cheaper prices.
In this context, simple actions such as making better use of natural light, changing lamps, appliances and luminaires for more economical models and replacing paper documents with digital documents can generate large savings and help reduce expenses. 3 - Adopt the time bank A good alternative to reducing expenses with work teams is to adopt time banking. The company saves on overtime, while the employee recovers time worked overtime by taking time off, amending holidays or extending vacations. However, so that this measure does not cause legal and labor problems, the employee must receive this compensation British Student Phone Number List the current year. Otherwise, you will need to pay him for those extra hours. 4 - Put the dismissal costs on paper To cut costs, laying off employees may not be a viable alternative. As much as it may seem good to reduce your payroll, before making this decision you need to consider the costs of terminating contracts. Before dismissing, also take into account the time it will take for a new employee to reach the level of experience and quality of those who left.
Renegotiate debts and bank fees Renegotiating your debts with creditors can be a great alternative to getting a lower interest rate and minimizing damage. However, it is also necessary to calculate whether the company will be financially able to pay this debt under the negotiated terms, so that it does not lose credibility in the market. It is also important to manage bank fees, as they can reach up to 1% of the company's revenue. Therefore, negotiate better rates with your bank, but remember: to achieve this reduction it is essential to be up to date with payments and have good cash control . 6 - Carry out a cash flow analysis Analyze your cash flow over the last 12 months and detect which ones saw a drop in sales and receipts. With this information, you can negotiate better payment terms to support the slow months without paying higher interest, increasing your profit margin. 7 - Improve supplier management Some companies spend up to 50% of their revenue on debts owed to their suppliers . To reduce these costs, your organization must establish better partnerships with suppliers or even look for other producers who offer cheaper prices.