It is the time of the year again when budgets are either met or need an additional push. Especially in today’s environment we need to pay an extra eye on our spending. Obviously not the right reaction to stop spending all of a sudden but a natural one as nobody wants to miss their targets.
Any company can come up with additional savings if needed, it just requires a creative and inquisitive mindset. To prevent knee-jerk reactions in times when things go a bit slower than normal we have listed some measures that could be worth considering:
1. #accountability for cost control for the whole organization
Cost control is not just part of a managements mantra, it should be part of the whole organizations goals. Employees, managers, should feel accountable when presented with a spending opportunity. They should consciously take the right decision for the corporation they work for and confronted with the results of those decisions in facts and figures at the end of each period. Make cost control everyone’s target by holding each other accountable.
2. Leverage technology / Automate
Using technology or your #information technology platforms to improve #efficiency may drive advantages that you have not yet considered. For example e-billing, having your invoices delivered to your customers electronically rather than by mail saves you a stamp, an envelop and more, this can be considerable on an annual #basis. Other examples of utilizing technologies are using bar-#code or RIF codes to track inventory through-out your facility. These measures may require an initial outlay but in the end will benefit your organization long term.
3. Use video conferencing solutions to reduce travel
Consider installing your PC’s with webcams or install a central video conferencing system. It may be a large initial outlay of #cash but what you get in return is a much more efficient organization: people have less commuting to internal meetings, customers or suppliers. It may not be the solution for all purposes but may go a long way.
4. #take control of your printing costs
Printing is so easy that we almost forget we not only print whole forests a day but we also use a lot of ink which is expensive and not to mention bad for the environment. Consider setting your printer defaults to print black and white instead of color and print duplex instead of single sided. Sounds like a minor issue, but do not forget that it starts with the mindset.
5. Revisit your Company’s Phone Policy
A very unpopular topic around management, the big offenders of the company phone policy. Using a #cell phone, regardless of your corporate #deal, costs a fortune. Think about how you would react if you personally had a 1.500$ phone #bill a month… I thought so. Consider your phone policy to your employees, have them review and sign their invoice, monitor the phone budgets centrally as part of purchasing’s metrics. Where possible and when in the office use voice-over-IP systems (VOIP) that use the internet (free) to connect just like a normal phone.
6. Install energy efficient equiment
Often overlooked but having a closer look at your energy bill may give you an incentive to install several, relatively cheap solutions to save energy. Think off light-sensors that turn-off your lights upon no movement, turn the heating down in evenings, lunch-breaks, etc.
7. Cut Travel or Travel Smarter
Travel is always an item that gets reduced first when times tend to be difficult. Not travelling at all may have some consequences as discussed earlier but there are other ways. Have you team travel coach, lend lease cars to those who don’t, or simply fly #economy.
8. Office & Computer Supplies
Obvious that putting up restrictions for the normal supplies get reviewed more closely, but the point here is to review systematically all #expenses that
9. Vacation day carry over reduction
If your vacation accrual is based on the amount of days people have build up for vacation (which is should be) then forcing, or rather requesting, people to take holidays during the year, will reduce the amount of the accrual having a positive impact on the P&L. The loss of productivity is obviously a side effect that should be considered.
10. Voluntary unpaid leave of absence and hiring delays
More drastic measures but very much effective on the bottom line but very much disastrous for moral. Use this tool carefully. Delaying headcount may be favorable to your P&L but means your existing teams have to either work harder or you miss out on productivity on the new hire, thus jeopardizing your company’s objective.
Make sure you build your next year’s budgets in such a way you have enough room for unexpected events. We recommend a continuous focus on #cost reduction, embedding this mindset in your culture and way of working, ultimately driving an efficient and cost conscious organization.
There are most certainly several other effective measures – including their potential side-effects – that we did not mention and we are keen on learning what your organizations do to maintain costs under control in a period of market volatility.