In a small company, every dollar counts. So business owners and finance teams should always look out for cost-cutting opportunities, especially during off-peak seasons.
With rising interest rates and costs of living, doing business in Australia has become more challenging. The Australian Bureau of Statistics reports that fuel and furniture were the most significant price increases in the quarter of June 2022.
So how do you get started with reducing your business costs? We’ve broken it down into five practical steps.
Go paperless
If your business still relies on papers for generating invoices, company memos, and claims, then it’s time to do away with this wasteful process. According to research, as much as 3% of a company’s revenue is spent on printing and filing papers.
Then there’s also the hidden cost of paper. PwC estimates that an employee spends 8 hours managing paper documents. Companies also lose over 700 paper documents annually, and it costs $122 USD to replace a lost document.
Going paperless is easy with automation, as it saves companies time and money by significantly reducing their paper management hassle - and your cost.
Improve processes
Inefficient business processes are some of the key contributors to costs. For example, if staff are burdened by performing repeated administrative tasks, then their quality of work would naturally decline.
To tackle this problem, businesses can look to improve their existing processes. While it may take time to analyse your business, you can start to by asking the right questions:
- Are my staff doing so much administrative work that it’s taking time away from their actual jobs?
- Can I outsource any administrative tasks to third parties?
- Are there processes that I can automate to save time and money?
- Is my company trying to do too many things at once?
- Should I limit the type of services I offer or the projects I take, so that my business is more efficient?
- Is my company producing too much output waste (i.e. leftover food, papers, money on entertainment)? How can I reduce it?
Thinking about your processes is a good first step to decreasing costs in your company.
Combine staff or customer activities
As a small business, you want to spend time marketing your brand to your customers, and making your staff happy. But having too many events in a month may adversely affect your finances.
To solve this, consider combining your events together. For example, you could combine staff training with company celebrations. In addition, if your business offers services to different types of consumers, think about having one single event that is tailored to all of them.
Utilise your space
Business owners can also consider using their office space when organising events instead of paying a restaurant or a venue for a fee. Space utilisation requires a bit of creativity, and there’s so many things they can do to maximise efficiency in this area.
Office spaces are a costly affair. According to Rubberdesk Australia, the median office space price for one person per month is at least $400, which can go up to $658, depending on the state.
If you have a traditional office space, you could look at your current office and ask - are spaces not used? Is the office overflowing with files, supplies, and underused pieces of furniture?
You could also consider doubling up existing spaces. For example, meeting rooms could be used as extra storage rooms, and storage rooms can be turned into workstations. Don’t forget the option of letting staff work from home! However, this consideration depends on your business and if it’s feasible to cut costs in this area.
Look at supplier payments
If you have multiple suppliers, now would be a good time to look at their existing costs and see if you can get better savings with different payment terms. If your business can afford it, it’s a good idea to pay an upfront or annual fee instead of monthly repayment.
For example, Budgetly customers can save $120 a year by switching to annual billing, which gives them the extra budget to spend on other expenses (think marketing and staff training!). To make things more flexible, customers can continue to pay for their prepaid corporate cards with monthly repayments, so they can add or remove cards as they want.
If you’re an existing Budgetly customer interested in switching to annual billing and saving $120 a year, contact your Budgetly representative for more information.
To learn more about Budgetly’s expense management software and prepaid corporate cards, download our eBook, Managing Expenses with Budgetly. Alternatively, schedule a demo with us today to find out how we help Aussie businesses make expense management easier.
