I’m moving house shortly, to Gloucestershire.
It’s the first time we’ve moved in over 30 years. So while this may not come as a huge surprise to you, I was somewhat taken aback to discover how expensive the whole operation was.
Not just buying the house itself – that’s a given!
But controlling all the little costs. They’ve mounted up so easily…
Because this is a fresh canvas for us, there are things we probably would have put up with in our old house that we don’t want to live with here. For example, we decided that the master bedroom needs a new carpet, and that the house should be deep cleaned before we move in. These are both costs I had not accounted for.
And – inevitably – we’ve spent more than originally planned on new curtains and blinds.
Pretty much the only item that’s come in under budget is the removal van…
I see the same thing happening with business expenses all the time.
When you try to control your costs, it’s only natural that you look at the big-ticket items on your balance sheet.
But often, it’s those smaller costs – the ones that your business pays for mindlessly – that cause the lasting damage to your bottom line.
For example, one new client we took on was really concerned about how much certain budget lines were spending. When we took a close look, we found just three items over £300. But all those tiny items added up to tens of thousands of pounds!
It’s easy to spend £75 here, £150 pounds there without giving it much thought. It’s even easier when it’s not your own money but the business’s money. Somehow, people tend to treat the two quite differently.
Because employees usually don’t see your balance sheets, either, they often just don’t appreciate the big picture. It can be hard for them to see how popping into the shop next door to replace an item they don’t really need ultimately affects the bottom line.
Getting these costs under control is critical to save money and increase your profitability.
But you can’t do it by reviewing people’s spending after the fact. That’s too late!
You need to install discipline in those who are in the position to authorise expenditure, so that they properly consider all spending requests before the money’s spent, and never simply approve an expense because it’s “small”.
And even more importantly you need to institute robust systems to approve and control costs. A good system means you don’t have to rely on people’s willpower or judgement. It’s the best safeguard of all.
That’s where we can help.
One of the first things our Outsourced Finance Department does when we start working together is to install all the financial systems and processes that a much larger company would take for granted – so your finances can be run much more smoothly, efficiently and safely.
Cost control is one of those systems.
Working with us saves you having to figure out things for yourself. Our process for cost control – like all our processes – has been used and optimised by dozens of businesses just like yours. So it’s all tried-and-tested. And we can get it up-and-running for you extremely quickly.
Then email garry@insightassociates.co.uk or call us on 01279 647 447 to talk to us about whether this is right for your business.
Warmly,
Garry
