How can a business increase profits without painful spending cuts?
Most common “go-to” strategies in business for reducing business expenses called for either doing with less or taking something away from someone, involving pain. Here are the most common strategies listed…
- Cutting Travel Expenses
- Hiring Freeze or Hiring Reduction
- Cancelling holiday parties and events
- Reducing “perks”
- Salary Freeze or Salary Reductions
- Reducing or Eliminating Year-end Bonuses
- Cutting Workers’ Hours
- Forced Unpaid Vacations or Furlough Program
- Increasing Telecommuting
- Four-Day Work Weeks
I can’t get excited about any of these strategies, can you? It is because all the strategies affect people that reduce morale and lower productivity.
So let’s imagine a diet where you do not have to change anything about what you are eating, or how much of it you are eating, yet you take in fewer calories? Sign me up for that diet. Unfortunately, that diet doesn’t exist for our eating habits, but what if you could put your business on a similar diet. A business expense diet that doesn’t require you to change anything about what you buy, doesn’t require you to change vendors, yet reduces the amount of money that you pay each month for those expenses. Well, fortunately, that business expense diet does exist. In fact, in many business expense categories, not only can you reduce your expenses, typically you can reduce expenses retroactively, getting a refund on money you already spent.
Expense reduction doesn’t have to be painful.
There are many expense reduction and overcharge recovery services available that fall through the cracks between Procurement, HR and IT departments. These services are offered on a contingency basis with a zero-risk guarantee meaning that if there are no savings, there is no charge. These services are quick and simple, and typically require minimal impact to your resources and none require changing of vendors or providers. So why not take advantage of these services?
Why savings opportunities are overlooked?
The following categories are mismanaged a lot due to the nature of services falling under Human Resources, Information Technology and Operations Department Management, in many cases leaving Procurement experts out (if they exist within an organization). The value Procurement professionals bring is improved negotiations that leverage various analyses i.e. current market rates and supplier management. Let’s just say, every professional within an organization has a gift to bring and adds strength to the table to affect the businesses bottom line for better.
Approximately 80% of business that pay for waste disposal are overpaying in their waste expenses. Waste Management Review Team lowers monthly expenses for solid waste, medical waste, and recycling disposables by finding errors, overcharges and other cost reduction opportunities without switching your current vendor.
Savings example: Procurement found out that the shredding service company was overcharging 65% compared to market rate while Human Resources was managing the supplier.
These days, wireless smartphones and tablets are used extensively by businesses and invoices from wireless companies often include overcharges and unnecessary fees. Wireless review program reduces wireless bills by 25 to 33%, and some clients have achieved over 40% annual savings without needing to switch carriers.
Savings examples: A Medical Practice with multiple sites are spending over $25K per month. After implementing several different recommendations they enjoyed savings of 28%. And another case a non-profit spending $4K month reduced their cost by 50%.
Parcel/ Shipping Category
Most companies are unaware that they are often overcharged for shipping services. Companies receive their monthly bill consisting of hundreds of pages of shipping invoices and have difficulty attempting to review for errors. Parcel Review Program looks at a company’s parcel costs via their primary carriers, and are able to request refunds to recoup those overcharges. The process is so simple and in addition to the savings generated by the refunds, clients save, on average, 11% of their annual parcel spend through optimization without switching or changing a thing.
Savings examples: One company discovered 23% savings simply using “Overnight by 3:00 P.M.” instead of “Priority Overnight by 10:30 A.M.” Many users admitted that, in most cases, the 4-1/2 hours would not matter. This same company expects to save another $11,000 per year by using emails vs. courier service for some mailing”
Credit Card Processing
Most businesses have tried switching their credit card processor for lower fees only to find that within six months they are back, paying at the same level they were with the previous carrier. There is an opportunity to analyze the business’ account and work with their current credit card processing provider to lower the processing fees. To ensure the business’ fees do not rise, the account is carefully monitored every month for three years and constantly recovering any overcharges. This program has nearly 100% success rate in identifying savings, and on average, businesses save over 21% or eliminated fees with zero cost fully compliant processing plan that did not require a contract as it is month to month basis and with cancel anytime option.
The good news is there are so many areas of hidden money for many businesses, getting access to money they didn’t think they had can help them complete that project that will help their business achieve success.
- If you could “find” money by reducing your expenses without adding more work to your employees or firing them, what project would you complete to achieve success?
- And if you are an employee, you could implement some costs savings strategies that could benefit your employer and impact your performance with your organization.
Your Savings Pro can help you Identify Expense Reduction Opportunities.