Everyone would like to cut their business costs. The starting point is knowing exactly where every penny goes. Your outsourced bookkeepers can help you with this, and when you have this accurate information, you’ll be able to see where you might be able to shave off a few pounds. Here are a few possibilities.
Staffing
If you need more help or someone leaves, instead of recruiting another employee, consider outsourcing to a freelancer. While the hourly rate may be higher, you only have to pay for the time needed, and you won’t have to pay tax, NI, sick, maternity or holiday pay. This also saves on reporting time to HMRC.
The VAT Reclaim
When you make your VAT return, do you know exactly what can be reclaimed on expenses, what is allowable and what is not. For example, if you have to hire a car, as long as it’s not replacing a company car which is under maintenance, and you have it for 10 days or less, you can reclaim all the VAT. Otherwise you can only reclaim 50% of the VAT.
Rules like this on VAT reclaiming are complicated and you need to get them right. Overclaiming can bring costly penalties, but don’t be among those who don’t reclaim because they are not sure what is allowed. Ask your bookkeepers for advice and get your head round the rules. Get your money back where you can. It all adds to the bottom line.
Advertising
If you have a budget for this, there may be ways to cut it. Social media gets the word around and can even be more effective than traditional and expensive advertising. If you have a presence on Facebook or Google+, Linked In and Twitter, and use it wisely, you could find the results far exceed what you get back through the advertising you have been paying for. Of course, using it wisely means taking time to post regularly, or paying someone to do it. Outsourcing it to an expert copywriter could replace some of the advertising in the budget and bring a better return on the investment.
Purchasing
There are almost always ways to save in this area. Do some market testing and keep you suppliers on their toes. Negotiate but be wary of volume discounts of supplies that might lose their quality before you can use them. One way that you could take advantage of these is to join a buying consortium of local small businesses. Not only could you buy amounts that attract lower prices, you’ll be in a much more powerful negotiating position.
Why not ask your outsourced bookkeepers for their ideas. They know your business and may be able to suggest any number of ways that you could cut costs.
