7 Simple Strategies to Reduce Business Expenses

Tuesday, 1 Sep 2020

Entrepreneurs are always burdened with the task of cash flow management. The best way to accomplish this feat is through the reduction of expenditure. However, it should not come at the cost of a decline in quality.

Thus most small business owners rely on the advice of professional bookkeeper in Melbourne to cut down their business expenses. They prepare the business for any unforeseen financial crisis while making considerable savings and profits.

They are adept at providing guidance for overcoming challenges and cutting costs without compromising on quality and integrity. Here are seven simple strategies that are recommended by bookkeepers to help businesses bring down their payables.

1. Sublease/Share Your Excess Office Space

The COVID-19 pandemic has changed the way businesses function across the country. It has affected the profits, and several entities are on the verge of shutting down. The businesses which have managed to stay afloat are stressing on remote working to keep their workforce safe and protected from the virus.

Thus the leased and owned office spaces are lying vacant in the Melbourne CBD, which is the most sought-after commercial real estate market in the country. Since co-working had already become a rising trend in the metropolis, it is the perfect time to share your extra space with a small business.

Also, with the pandemic leading to stage 4 lockdown in Melbourne, it is highly unlikely that the employees will be returning to their workstations anytime soon. Thus businesses which have large areas that are not utilised by the employees can be leases or shared with other businesses.

It can earn considerable rent, which can help you to pay a part of your own rent or loan instalment. If the lease is too high, you can even consider relocating to the suburbs. Your bookkeeper will enlighten you about the best option that can reduce the rental costs.

2. Bring Down The Cost of Utilities

The utilities and amenities being used by businesses can add significantly to the outgoings. You can make a lot of savings on your energy bills by smart working. Besides turning off the lights and machines when not in use, you must also think about switching to energy-efficient amenities.

Many businesses in Melbourne are opting for solar panels to fulfil their energy needs. It is especially advantageous for manufacturing businesses and others which have massive equipment and generators working throughout the day.

Additionally, rainwater harvesting is the need of the hour and also helps in saving the environment and water bills. Bookkeepers recommend this because it helps in getting renewable power incentives from the government.     

3. Become A Paperless Entity

Traditional bookkeeping required using streams of paper and organising all the hard copies of invoices and bills manually. However, technology has helped in eliminating these tedious tasks and going paperless.

Every business in Melbourne must adopt the digital mode and take out the use of paper from their organisation. It can save a lot of cost and trees. Follow E-invoicing and billing and make all the transactions online so that there is no use of paper.

All the employment forms, applications, proposals, drafts, HR forms, etc., should be transformed into digital material and saved on the cloud so that it stays safe and secure. From cloud-based accounting software to payroll management system, you can use a variety of such tools to reduce the consumption of paper. Digital assets are easy to organise and locate and cannot be lost.

4. Use Free Online Tools To Reduce Costs

Client calls, internal phone calls and business travel can lead to significant business expenses in Melbourne. Most bookkeepers suggest utilising the digital medium to communicate with employees, clients, stakeholders and associates.

You can get rid of the desk phones and leverage the cloud-based system to get a call on your Smartphones free of cost. Also, instead of travelling long distance on company expense, the meetings can be organised over Skype and Zoom.

These free tools, along with the facility of emails and live chat systems, can help you to reduce the phone bills, which add to the outgoings because of inflated tariffs.

5. Outsource Time Consuming Tasks

There are various tasks that take a lot of time and end up tying up important resources. The time spent on content creation and organisational development can be outsourced. It reduces the number of hours that are wasted in putting together an article to be published or a blog to be posted on the company website.

You can hire freelancers in Melbourne who can do the job at half the cost and at lightning speed as they are experts in the field and have worked on several such projects.

The freelancers are paid only for the hours they work and they are not paid other employee benefits. Also, you will not have to waste money on getting the same thing reviewed and fixed several times as you will be getting high-quality work.

6. Trim Down Your Marketing Budget

The financial projections and cash flow forecast created by the bookkeeper allow the entrepreneur to understand the available capital and future sales. Thus the business owner can adjust the budget after analysing all the financial documents.

Most bookkeepers suggest reducing the marketing budget by opting for free marketing tools, such as email advertising to send offers and discounts to the existing customer base and get repeat orders.

Utilise social media channels like Facebook, Twitter, Instagram, Pinterest and LinkedIn to engage the target audience and increase the visibility of the brand. Join discussion forums and Quora to resolve queries and generate higher web traffic.

Start a loyalty program to make the customers come back as it is cheaper to retain buyers. Make them write positive reviews online to improve your brand’s reputation in Melbourne.

7. Reduce Your Debts

If you are paying a high-interest rate on your small business loan in Melbourne, then your bookkeeper can guide you to get it transferred. Also, do not make big purchases using your business credit card as the debt can become challenging to manage.

The bookkeeper will help you to stick to the pre-defined annual and quarterly budgets by making informed financial decisions. An excessive amount of debt can create a deficit and reduce the credit score of the business.

Instead of investing in new costly equipment, you should opt for refurbished machines and fixtures that save money. Improve productivity and organisational efficiency by setting individual KPIs and measuring them regularly.

Conclusion

If you are running a business, then make sure you use these simple strategies to reduce business expenses suggested by professional bookkeepers in Melbourne. These can go a long way in helping you to improve your profits and maintaining optimum capital reserves.                 

 

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