Managing business finances and cash flow is difficult, especially for start-ups and SMEs. Everyone seems to be tightening the purse strings at the moment, but making savings doesn’t have to come at the cost of quality of customer service. There’s a variety of ways businesses can keep monthly outgoings down to increase revenue and balance monthly profits and expenditure. With a few simple changes in payment policies and switching suppliers you could notice a big difference.
Cutting business overheads is a clear strategy that works, but it can involve making some difficult decisions. You might need to cut a member of staff or end a long term contract even though you’re happy with the service. However getting on top of your accounts is important to keep your business flourishing. Here are some top ideas for keeping your monthly expenses low.
Use freelancers and contractors
The gig economy is booming, and it has advantages for companies as well as freelancers. Hiring a full time employee can be a lot more expensive than hiring the services of a contractor – especially when you factor in NI and pension contributions. By choosing a freelancer, you’ll benefit from high quality work from a specialist, and you can pick and choose how much they work for you. The same can usually be said for service providers – it is often cheaper to hire a commercial cleaning company than pay a full or part time member of staff in-house.
Don’t commit to contracts
Some contracts are essential – for example each month you need to pay your rent, your telephone line rental and broadband. But apart from these, try and keep monthly contracts to a minimum so you’re not committing to pay for something that you might not be able to afford. Some service providers might ask for a minimum contract length of a few months, or offer a discount if you sign up for a longer period of time. Steer clear if you can and opt for a pay as you go service wherever possible so you only pay for what you need.
Cut Back on business travel
Not all travel is essential – and it eats up into your expenses. Whether you’re paying for public transport or mileage, a number of business meetings every month can add up to a significant amount. Why not swap client meetings and business lunches for a conference call or video chat? There are a multitude of communication software options available that are free or cheap which you can take advantage of, so ask yourself whether each journey is really necessary.
Start cutting back on monthly costs and you’ll notice your bottom line increasing.