Penny-Pinching Pays

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MONEYSAVER

Playing Scrooge is not just for Christmas any more.

Even though penny-pinching is harder to do today
without any pennies, the concept remains valid and
is especially applicable to the expenses incurred by
small businesses. Here are a few ideas to improve the
bottom line.

Outsource

Employees require salaries and benefits as well as
insurance, office space and equipment. Contracting out
office tasks transfers these costs to a highly competitive
third party and frees up your own premises for revenue-
producing uses.

Negotiate with Suppliers

Contact your suppliers and see whether you can get
a better deal. Far too often suppliers mechanically
increase prices without recognizing the value of a longterm,
reliable client. Why should rewards and discounts
go to new clients while long-standing customers like
yourself see costs go up? Call and make your pitch.

Use the Cloud

Using the Internet to send invoices and make and
receive payments saves the cost of cheques, envelopes,
letterhead and postage as well as the related labour.
Further, cloud-based solutions for almost every manufacturing
or accounting need are available for a reasonable
“lease” rate. Such an approach reduces the cost of
buying and installing software and assures you your
cloud services will always have the latest updates.

Consider In-House Printers

Many businesses still need to print data to hard copy.
Consider purchasing a laser or inkjet colour printer.
Once templates for invoices, letterhead, or business
cards have been installed, they can be printed as
needed, thus eliminating large inventories of preprinted
forms. The templates can be adjusted for
format changes or for staff and address changes.

Face-to-face meetings are not always necessary.

Meet with Telecommuting

For most business communication, a face-to-face
meeting is not necessary. Virtual meetings will work
if the number of participants is small, the meeting is
kept short, and the agenda well planned. Establishing
timelines, requesting daily updates and having access
to work-in-process by the use of shared cloud facilities
will ensure projects stay on time and on budget.

Maintenance

How often are the premises cleaned? Perhaps reducing
the frequency of cleaning or having staff empty their
own waste baskets at the end of the day are options
that will reduce costs without impacting the tidiness
of the office.

Go Paperless

Going paperless can be difficult for older employees
used to paper trails. Paperless offices must establish
a filing system suitable to everyone; this includes
scanning every piece of paper that comes into the
system and allocating it to the appropriate folder.
Going paperless also means reviewing existing client
files and purging data no longer required for taxation,
legal or business purposes. This is the time to adopt
standard records management practices for preserving,
storing (onsite and offsite) and destroying documents.
Scanning documents saves the cost of renting physical
storage space, using employee time to file paper, and
ultimately shredding and disposing of that paper.

Review the Cost of Your Premises

Signing a long-term lease may lock your business into
a lease cost that will not be acceptable in the future.
Look ahead and determine how your business will
evolve over the next five years. If your strategic plan
includes increasing or decreasing your space, consider
signing shorter-term leases that allow an exit with, for
example, three months’ notice.

If you own your building but no longer need all the
space, consider subletting. You might also think of
selling or leasing the entire property and moving to
a smaller space. Such a move would provide proceeds
from the sale of the building or lease income while
reducing your own rental costs.

Think about Your Future

Taking an hour or so with your CPA to look at your
current business model and associated costs will help
you think about changes that will positively impact
the bottom line and ensure that your business keeps
on going.

 

Disclaimer

The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.

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