Business expenses matter greatly, right? Business owners realize this and agonize over every penny being spent. However, as the business grows in size, you will no longer be able to watch every dollar. The following are a few tips that help your company control costs as your business expands:
Purchase consolidation & price negotiation
Validating your purchases and negotiating better pricing with vendors is always a good practice when it comes to business cost control. Also, reviewing your major vendors is important for companies that experience recent growth. Renegotiating often is very important.
Review vendors regularly
It is a good practice to make an annual or semi-annual review of key vendors in your company. Ensure you automatically flag renewing contracts and make reviewing mandatory for every contract you get involved.
Ask for discounts
Train your team on how to get discounts from vendors and let them get contracts on better negotiation. This would help reduce variable expenses by 5-10 percent, which can account for significant savings in the long run.
Balancing variable expenses vs. fixed
You should have the flexibility to change variable expenses up or down to suit your cash flow and business requirements. Doing this would be highly valuable.
Cultivate discipline across company spend
Choices you make as the business owner will effect the culture of the company. Keep in mind that your team will be watching you, and hence you should be much more conscious while spending on your company’s dime.
These tips will help you control expenses and cut business costs. The choices you make and the actions you take will have a direct impact on your business spend. Use online expense report software to monitor and control business expenses.