It can be easy to be overspending as a business and not even notice. There are so many aspects of a company that require financial investment, that excess spending can creep up on you.
Over time, this excess spending can lead to cash flow problems, which could potentially put your business at risk. Even if you are adamant that you're making all the savings you can, you should set aside time on a regular basis to review your outgoings just to make sure.
Here are five simple ways you could be spending too much:
1. Review your software
It's important that your software always meets your needs as a company but, as these change, you may need to adjust it. Tools like Slack, Trello, and LiquidPlanner may not cost much but they soon add up, and licenses with Adobe or other professional-level software can be expensive.
You need to review your software usage and how engaged employees are with it. It may be that it makes them much more productive or they literally couldn't do their job without it. However, it could also be that no one has used it in years or you have subscriptions that you've completely forgotten about.
2. Negotiate with suppliers
Your relationships with suppliers are crucial to the effective running of your business but you need to make sure you are getting a good deal. Negotiating with these companies can be a good way to save money but you should be careful how you go about it. It’s important to remember that you would feel devalued if someone was offering to pay your company less for its services, and so might they.
If they won't budge on price and other suppliers are cheaper, you need to balance the potential risk of moving to another company and how much it could impact your operation.
3. Evaluate your expenses policy
Staff are usually trustworthy when it comes to expenses, but doing spot checks every now and then can help you see whether there are any errors. Something may have been processed twice accidentally or employees may not be clear on what they can and can't expense. Clarifying this and giving more structure to your expense process will avoid confusion, increase consistency and prevent you from overspending.
4. Check your bills
Running an office can soon get expensive. From the upfront rent to electricity, internet, and heating, it can be a big sum. However, this means that you may not notice if one of these areas suddenly increases. Many companies will put up their costs unless you contact them to negotiate another price so it's wise to occasionally review this.
It's important that you don't just go for the cheapest offer though. Internet, for example, will need to be reliable and fast enough to keep all of your employees working efficiently. Going for a deal that costs less but drops out frequently is likely to lose you more money in time than you save.
5. Review your employee benefits
Employee perks are a fantastic way to make your staff feel valued, increase employee retention, and boost advocacy. However, they can be incredibly costly and you could potentially be spending a lot of money on things people don't use or don't want. Instead of cancelling elements of your benefits package, talk to employees about what matters to them and prioritize them.