Follow these five tips to save money on your corporate spend and streamline processes too
Managing expense costs are a necessary evil. Necessary because they can quickly get out of control, costing the business far more than it should for everyday expenditure. And evil because the time taken to keep expenses under control feels wasted, inconvenient and unnecessarily complex.
On top of this, we’re in an economic environment where prices are steadily rising across the board. The differences seem small at first but left unchecked, businesses can find themselves sleepwalking into paying much higher prices for the same quality goods. However, there are steps you can take to get your expenses bill under control and stay on top of increasing prices.
1. Shop around: Make it part of your expenses policy to keep costs constantly under review. Examine quarterly invoices to see if there’s a pattern of increasing prices or if the current supplier is still the best deal around.
2. Let your supplier know you’re shopping around: We are all operating in a competitive marketplace. We know that quality service is important to keep our customers loyal but this doesn’t mean they’ll stay if our prices aren’t competitive. The same goes for our suppliers. This doesn’t mean you should jump ship as soon as you spy a price rise. Depending how big the change is, it might not be as economically viable considering the time it takes to switch providers, potential upheaval and man hours involved.
Giving your supplier a chance to pitch isn’t just good sportsmanship, it gives them a chance to review your deal and see if they can either cut the price or bring a value-add that makes your deal attractive again for both of you. Don’t be afraid to negotiate, remember it may well cost them more to find a customer to replace you than to accommodate your changing needs.
3. Get on schedule: Along with reviewing suppliers you use as and when, the business will be running on a number of subscription services. Make sure you have a central resource where you can see when renewal dates will come up, how much your current deal costs, what the renewal fee will be and where to go to find out if there are better deals out there. For a huge number of utilities, for example, loyalty rarely pays.
Check out better deals on telecommunication and energy in particular. Even if you’re in the middle of a contract, if a so-good-it-can’t-be-beat deal comes along, review what your early break penalty might be. It could well be worth it.
4. Rationalise spend: Review what you’re buying in and for what purpose. You may be buying the right amount but is the request coming from two different departments who are essentially doubling up.
Give departments visibility of where their spend is going and make suggestions as to where economies could be made.
5. Ditch the debt: While it’s not always possible to run a ship that’s always in the black from an expenses perspective, companies often hold onto unnecessary large amounts of inventory. Either from ordering things in out of habit (they’ll come in useful eventually) or departments over-estimating their needs, it’s worth instilling a company-wide policy of efficient procurement.
Where expenses are inevitable, consider negotiating favourable terms with suppliers that allow payment once the cash is in the business. If this isn’t possible, it’s worth looking at corporate credit card solutions that bridge the invoice period with an extra payment extension. It goes without saying that this has the potential to become an even more expensive option if purchases made via card aren’t cleared before interest falls due.
Using corporate credit cards needs to be part of all the points made above - source the best deals on the market, review constantly, be aware of who is using them and why and schedule payments to make them as effective at cost reduction as possible.