Company financial records hold the key to potential savings opportunities. A professional accountant can guide you toward decisions that can change the course of your business in terms of how much money it can save, free up and strategically reinvest.
A good accountant should do more than just help you file your taxes. He or she should be a cheerleader for your business success. This means helping you scout out savings to save your company money, using their expert eye on financial reports, such as your profit-and-loss statement. Your accountant has a unique perspective on your business, after all. This perspective should be used to leverage savings when possible.
Savings opportunities may be more plentiful then you realize.
A Harvard Business Review article on financial management says, “In some departments, it’s supplies; in others, it’s telecom or computers. You can almost always find 15% to 20% of spending that hasn’t been managed closely.” This time of year — when there aren’t tax deadlines distracting your accountant — is a great time to find that spending.
At Kerby Accounting & Business Solutions, we build savings road maps for our clients by analyzing their business accounting reports to see what is not producing as it should in terms of investment.
These road maps lead the way to purposeful, strategic business decisions to better their companies, answering questions such as:
· Where is money being wasted?
· Are there areas of their company where efforts are being duplicated?
· Does a company have divisions that are just not profitable?
Multiple factors at play
It can be difficult to objectively determine areas of savings within your own company. As business owners, we sometimes see certain areas of our company through an emotional lens. But a professional financial review by an accountant can shed light on savings opportunities that will pay off long term and make for a more streamlined work environment for your employees as well.
Here are areas to consider for potential business savings that can boost your bottom line:
· Can your company reduce the physical space it uses, maybe having your team or part of your team work remotely?
· What is the ROI (return on investment) on capital purchases, such as new technology? Will it allow you to increase production and lower headcount, or increase production without increasing headcount? That is the item’s true “cost.”
· Might leasing be a good option for equipment your company needs, as opposed to owning it, or buying items that are slightly used?
· Could your company benefit from writing off or selling old inventory? Inventory costs include the cost of capital, insurance and storage. Reducing inventory levels frees up working capital.
· Are your employees all giving your business what it needs? Additional training, coaching or shifting roles may be needed, or changes in personnel may be called for to remove blocks to success.
· Have you asked your vendors if they offer discounts for paying invoices early?
· Have you explored how outsourcing certain administrative roles, like payroll, media planning or benefits management could improve your company’s bottom line?
· Are activities coordinated across your organization? Examples: Substantial travel discounts can be organized at certain hotels if various departments utilize the same locations, or supplies may be needed by one department while they are overflowing in the stockroom of another.
Working with business owners to help them maximize savings — and therefore, success — is rewarding work. We look forward to setting an appointment to scope out areas where your company can keep more of the money it makes.
New clients welcome!
Feel free to give us a call today.