Unusual places to look for cost cutting

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Unusual places to look for cost cutting

By Anna MaskerIn standard25th November, 2008

We all know that we should turn the lights off at the end of the day, and cut down on buying extraneous office supplies, where else can you look to save some money for your business?

  • Get your unemployment rate audited: Did you know that your unemployment rate increases with the number of claims filed against you? Paychex offers a service that audits your claims to ensure that there are no fraudulent claims, which may raise your rate. New Jersey unemployment costs for workers earning $27,700 or more is $83 to $1,939 per employee, depending on your state-dictated rate. If you have high turnover due to layoffs or terminations, then you are probably in the higher unemployment rate category and may want to invest the time to make sure your rate reflects valid claims. You could save yourself a bundle and reduce your rate.
  • Fire your unprofitable customers: Instead of looking to lay off staff, you may find equal or greater savings by getting rid of your unprofitable customers, all while keeping up morale. In almost every study that has been conducted to measure customer profitability, on average, 80% of a business’s customers were either unprofitable or just breaking even.  The key is to analyze your numbers and find the top 20%. Then develop a strategy to deal with the rest. Maybe you raise your prices to make them profitable or offer additional services. If they don’t agree, then let them go. After all, You you are, after all, in business to make money.
  • Do a review with your accountant BEFORE the end of the year. “Wait,” you are thinking, “that is actually going to cost me money.” Yes, it will. If you have a good accountant, however, he or she will ensure that you are maximizing your tax savings in this fiscal year. There are good tax write-offs for capital purchases which that require that the acquired assets be put into service by the end of 2008. A meeting with your accountant can tell you if they will be advantageous for you and could save you a bundle in taxes.
  • Renegotiate your lease with your landlord: With the economy in a downward spiral, many companies are downsizing their office space. Shop around for office space in the area and then negotiate with your landlord. A good guide for available properties and going lease rates can be found at www.BlacksGuide.com. When looking at the market rate cost per square foot, make sure you ask the property manager about common area maintenance (CAM) charges, which could be a significant addition to your total leasing costs.
  • Review your insurance policies: Insurance rates have been declining over the past few years. If you haven’t reviewed your contracts in a while, it might be a good time to shop around for better rates. It could mean hundreds or thousands of dollars of savings. If you have competitive rates, find out how much more you could save if you raised your deductibles.
  • Scrutinize your bank fees: Banks are becoming more competitive for your deposit dollars and may offer special discounts if you consolidate your accounts and add direct- deposit. Be wary of introductory offers because moving accounts can be a tedious task. Don’t rule out credit unions who are stepping up their small small-business services and often don’t charge the fees that larger banks do.
  • Reduce bad debt expenses: Besides watching receivables like a hawk, it can’t hurt to run a credit check on new customers before you extend them credit. Experian offers a credit check service for roughly $50.  Another way to reduce your risk is to accept credit cards or require a down- payment for the work you do. These are ways for you to improve your cash flow and make sure you get paid. If you run into problem accounts, then services like such as Green Flag offer cost-effective collections services.
  • Get discounts on your payroll service: Many credit unions offers discounts on Paychex services if you have accounts with them. In addition, you can offer membership to the credit union as a free benefit to your employees.
  • Get discounts on QuickBooks products. Did you know you could save up to 40% of an online subscription to QuickBooks if your bookkeeper or accountant is a Pro Advisor? That could mean savings of up to $167 per year.
  • Consolidate your debt: Believe it or not, banks still have money to lend to worthy borrowers. The SBA just announce new plans to expand its lending opportunities.  If you happen to be in good financial standing, see if you can consolidate your high-interest interest-rate credit card debt into a lower-interest loan.

How have you saved your business or your clients money?  Post a comment below and let us know how you are managing expenses in this recession.

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