REVIEW THESE SIMPLE PRACTICES TO HELP YOU SAVE MONEY BY REVERSING BAD BUSINESS SPENDING PRACTICES.
There are certain business expenses you can’t avoid — payroll, computer equipment, utilities. But you may be losing profit by overspending without even knowing it. Businesses can often overspend in several different ways, including:
- Inconsistent analysis
- Not creating a budget
- Going over budget
- Purchasing without permission
- Wasting supplies
- Not vetting your vendors
Keep reading to discover how to stop overspending and which budget items deserve closer inspection.
There are plenty of opportunities to save money, but only if you commit to consistent audits. Failing — or forgetting — to review your budget items could cost you.
Solution: Create a culture of cost reduction. Some organizations have even implemented a reward system for identifying cost-saving strategies. Small changes can add up fast. For example:
- Assess whether you’re maximizing your physical space. (For example, if more employees are working remotely, could you reduce your office footprint to save on rent and other expenses?)
- Bundle utilities such as gas and electricity or phone and internet.
- Evaluate expenditures such as insurance rates or cell phone fees.
- Analyze the return on investment of marketing campaigns.
- Ask vendors about bulk purchasing discounts.
- Reduce energy use (for example, install automatic controls for lights and temperature).
NOT CREATING A BUDGET
Budget planning allows you to make informed decisions. It helps with short-term spending — such as whether you have enough money to upgrade to new software or hire a new employee — as well as saving money for the long term, securing additional funding, and paying off debt.
Solution: No one can predict the future. But having a solid spending plan and a budget tracking system in place is a must. It’s also important to continually monitor internal profits and losses and ongoing industry trends so you can adapt accordingly.
GOING OVER BUDGET
Going over your set budget might happen for a few reasons, including unanticipated expenses or failure to meet earning goals.
Solution: First, address the deficit as soon as you can to avoid long-term issues. Then, examine your organization’s policies to identify where you can prevent future overspending. Define clear spending limits for employees; work with purchasing to ensure they understand spending policies, procedures, limitations; and when possible, set aside a rainy-day fund to cover future imbalances.
PURCHASING WITHOUT PERMISSION
Even with clear guidelines in place, there are times when employees with access to company expense accounts spend with abandon. This could mean an extra meal or a first-class plane ticket you didn’t account for in your budget.
Solution: Ensure you have strong policies in place and educate all employees who have access to company funds. Include real-world examples of good and bad corporate spending, and implement a robust tracking system, so it’s easier to identify where overspending is happening. Consider using prepaid company cards loaded with a set amount of money. Here are more in-depth tips on how to track employee spending and expenses.
Office supplies are a normal expense for organizations of every size. But there are ways to spend smarter and be more eco-friendly while you’re at it.
NOT VETTING YOUR VENDORS
Selecting a vendor can be a complicated process, and sometimes businesses skip the hassle and go with the most convenient option to save time. But you might be overspending or losing out on valuable discounts and relationships.
Solution: You can reset and find the right supplier for your unique needs. Start with an internal business analysis. Conduct a vendor search, submit a request for proposal, and carefully evaluate each company. Finally, strategically negotiate the contract to ensure it benefits your business.
Now that you’ve learned more about how to stop overspending, EZ Office Products’ experts can help you explore options that are friendly to both your budget and the environment. Get started by contacting one of our dedicated account representatives at (608) 310-4300 or browsing our online catalog.