Reducing Outgoings Made Easy
There's been a lot of discussion recently about the need to cut business costs. I read an article the other day that maintained you could cut your costs by up to 75%. I just don't understand where such figures come from - how can you cut your rent, rates, power or telephone bill (or even wages in many small businesses unless the proprietor works 24/7)?
However, there are some practical things you can do:
- Check all your supplier bills personally before they are paid even if you have a large number of staff. After a while you will get a feel for costs and whether everything is correct.
- If you have staff, check their time sheets carefully to make sure they are accurate. If they are used as a basis for invoicing customers look at their productivity and down time.
- Fraud, both substantial and petty, is on the increase. A few simple steps will prevent fraud occurring in most cases.
- Don't forget to invoice customers for all work completed. I'm always surprised by how common this is and talk about daft!
- Get your staff sick & holiday pay right. I know it's tediously complex, but in my experience, the majority of small businesses are not working these out correctly, often leading to excess leave being taken. They will soon tell you when it's wrong in their favour but ...
- Don't pay the IRD or suppliers who charge penalty interest late, you will just be throwing money away - the IRD rate is equivalent to 25% plus.
It's difficult to run even a small business without simple systems and procedures and it shouldn't take a downturn for business owners to realise this!
If you have any tax or business queries of any kind telephone 0800 ASK NICK, e-mail email@example.com or use "Contact Us" on www.abac.co.nz. The information in this article is of a general nature and should not be relied upon as a substitute for specific advice.