When it comes to running your business, the hardest thing to do is to lower your overhead costs. These expenses can easily stack up and seem impossible to lower, but here are a few tips for getting them down to manageable levels.
Reduce Your Energy Bills
Energy costs account for a good portion of your company’s overhead costs, especially in businesses reliant upon machinery for production. By improving the building’s energy efficiency (e.g. new roofs, energy efficient doors and windows, LED lights, etc.) you can greatly lower your energy bills and start saving on your monthly overhead.
Lower Your Rent
If you have the ability to maintain your manufacturing/production quota in a more affordable facility, it would be in your best interest to switch buildings. Shaving off a few hundred (or even a thousand) a month will lead to significant yearly savings and opens up your budget for emergency expenditures or expansions!
Keep a Close Eye on Your Company Vehicle Mileage
If your business relies on vehicles to carry out any sort of operations, it is incredibly important to keep a close eye on how the vehicles are being utilized and the amount of mileage/fuel being used on a weekly basis. Since vehicles are depreciating assets, a good chunk of your overhead will have to be put toward fuel, maintenance and vehicle replacement. Monitoring your fuel consumption and mileage can save you in both immediate and future costs.
Examine Your Employee Salaries and Benefits
Obviously, looking to reduce your employee salaries/benefits expenditures is a tricky business, but there are ways to do it. First, see if there are ways you can add to your employees’ responsibilities without overloading them and reducing the quality of their work. This can aid in your operations, without requiring the addition of other employees to the team. Second, see where you can hire part-time employees who will not be eligible for benefits. Finally, find creative ways to reduce the cost of benefits without reducing the actual benefits. Example could be providing Health Savings Accounts (HSAs), high deductible plans, voluntary benefits and switching carriers.
And the Best Solution of All…Hire an Accountant to Monitor Your Expenditures!
At the end of the day, the best way to reduce your overhead expenditures is to hire an accountant who can examine your records and conclude where costs could be cut. A thorough investigation into your bills, payroll and financial practices can give you the information you need to make immediate changes to your spending habits. A skilled accountant can also prep your taxes in a way that maximizes your deductions and return.
Reducing your overhead just takes a little imagination and a good handle on your business requirements/employee needs.
Need more ideas on how to reduce your overhead and make your business flourish? Call us at Beaton Accounting today―we’re always happy to help! 631-921-6894
Have a question or topic you wish we’d discuss? Leave a comment or email us at info@beatonaccounting.com