Top Priority
Revenue generation is a top priority, of course. But it is equally important that the greatest possible number of top-line revenue dollars make it to the bottom line. Radical cost-cutting almost always has its downside, but every business must be prudent in its cost management, for the sake of shareholders employees alike.
For many businesses, particularly those who have experienced strong growth, focused expense consolidation can yield tangible improvements to the bottom line. Travel and accommodation, for example, is a category that can often be consolidated (with the help of an outside specialist firm), to both reduce costs as well as improve the quality of the “road warrior” experience. Corporate cell phones, as well, can often be consolidated into one overarching plan, to achieve a lower ongoing cost structure for this form of communication. For that matter, broader telecommunications costs can often be managed down, with no deterioration in quality, through the use of specialist firms that help you better navigate the complexity of today’s myriad and confusing telecommunications plans. To say nothing of ensuring that you are just not being overcharged in error (a surprising number of monthly telephone bills, for instance, go out just plain wrong, and get paid anyway). Partnering with complimentary businesses in terms of marketing efforts can often both reduce costs as well as improve results (for example, mortgage brokers aligning with real estate agencies to more cost-effectively source new business). Finally, ensuring broad employee involvement in the yearly budgeting process (and therefore getting stronger buy-in to that budget) can often help both in terms of developing spending plans that are relatively free of “waste” and “padding”, as well as ensure that the budgets developed are effectively monitored and adhered to.
What’s Key
Proper technology and information infrastructure also plays a key role. Robust accounting systems will help you cost-effectively track actual expense levels, and alert you to areas needing attention. After all, you can’t manage what you don’t see. If yours is a professional services business, certain enterprise software can help you better track and bill reimbursable client-related expenses that would otherwise come out of your end profits. Voice-Over IP telephony systems can often streamline overall telecommunications costs, sometimes dramatically. In some cases, Enterprise Resource Planning (ERP) solutions can automate many areas of traditional expense management, freeing up accounting staff to better manage receivables, and thereby improve cash flow. Finally, Customer Relationship Management (CRM) solutions that contain customer service components can often allow for better ongoing management of service-related staffing levels and costs. Idle call center staff benefit neither your company nor your customers.
Whatever your precise circumstance, a variety of techniques and tools can help your business better consolidate and manage costs. And, of course, take good care of the bottom line.
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