Benefits of Analysing and Reducing Business Overheads

Successful businesses analyse their expenses to ensure their costs do not get out of hand. It doesn’t matter if that is the cost of the raw materials for the products you manufacture, the items you are reselling, or general overheads – they all affect the bottom line. Knowing exactly what your costs are makes it simpler to make the right financial decisions and ensure your business venture is profitable. Here are a few suggestions that can help you keep your overheads low, if your business is located in the UK.

Energy Bills

Most businesses with a physical presence have energy bills. Simple checks like ensuring equipment is turned off at the end of the day instead of putting them in sleep mode can help reduce costs, as every little red light comes with its costs.

Look at the tariffs you are paying, especially if you have been with the same supplier for some time. You may be thinking that you do not have the time to go searching for a cheaper one, but all you have to do is find a comparison site like Utility Bidder, to hunt for the best deals. 

Postage

Most businesses no longer have the huge volume of post they had years ago, with the proliferation of emails and alternative forms of digital communication. If you still have physical mail, however, you may be able to save money on postage by investing in a franking machine, which will grant you access to Royal Mail franking rates which are cheaper than buying stamps. As an added advantage, the franking stamp can include your company’s logo, which will make your mails look more professional.

Mileage

Buying company cars can be very expensive and when you add up the running costs for over a year; they could be costing you a fortune.

Changing to paying mileage can however, result in benefits to both the employee and the company. The idea is for employees who are eligible to receive this benefit, to use their personal vehicles and record the business miles they have travelled. For example, the business may opt to pay 45p per mile for the first 10,000 miles, which the employee can recover free of any tax charge. As a business, you will not have to worry about repair bills, insurance or road tax as the vehicle will not be your responsibility.

Analyse All Overheads

You would be surprised at how much money you can save on overheads if you took the time to analyse your expenses to see where you can cut back. Are your office supplies properly controlled or could you get a better deal from your bank? These are just a few examples and you would benefit from examining your expenses closely to see what you can reduce if you want your bottom line to be the best it can be.