Tips On Controlling Your Business Costs

Saving your company money can become a complicated business depending on the techniques you use, as there are lots of ways to control costs.

In the past, some businesses decided to take drastic measures and a heavy handed approach to reducing their outgoings by issuing redundancies and outsourcing tasks. These may reduce costs but there are other ways to get similar results without making these kinds of decisions. Controlling costs is frequently becoming a planned manoeuvre, with training courses suggesting what may be best for your firm.

Where to start

First of all it's essential to decide where to cut outgoings and identify the areas you wish to focus on. This is not always straightforward, but once you establish the types of costs your firm generates then you can decide where to make cuts. These kinds of outgoings are sometimes referred to as cost centres and they describe the different elements that make up your entire company.

For example, you might want to look at the parts that are traditionally responsible for running up significant costs, such as staff wages and materials needed to provide the services you offer. When it comes to controlling costs, you need to have an idea how much time is available for you to put your plans into action.

If you're keen to make long-term changes and have been allocated sufficient time, then you might want to look at liabilities such as long-term loans to find out how you may reduce expenditure. Otherwise there are many cost cutting ventures that can be applied in the short-term, such as using innovative technology.

Gather your team

If you're more of a one-man band when it comes to running your company, then it's likely you will act alone or with an accountant. However, larger firms may require input from several different staff members when it comes to controlling costs. Consider who would offer high levels of expertise or input before making decisions on changing process within your firm.

These could include employees and your customers. The latter group may be able to offer tips on service improvements, so you're more likely to target the correct areas when it comes to cutting costs.

Use business accounts

Before you apply cost reducing methods, it's a good idea to look at the current and past state of affairs by examining your company's figures. Also these should be compared with your organisation's objectives so that you stick to the aims of your cost controlling venture. Standard costs ought to be compared with budgeted and actual costs, so you get a realistic reflection on how reducing expenditure will/has affected profits.

Deciding on the best cuts

As mentioned previously, there are many different ways of controlling expenditure. If they meet with your objectives and fit with your costs then you basically have the green light to go ahead and make changes. For example, you may wish to cut utility bills by installing generators that run on wind or solar energy, but it's important that the costs associated with setting up these systems do not break your budget.


Other long-term decisions need to be considered from different angles, as they may negatively affect your company. For instance, cutting staff training schemes or pay may reduce morale and skills development and lead to a workforce that does not work at its optimum levels.