Ten ways to cut your costs

Start with your overheadsOverheads can count for up to 20 per cent of a company’s expenses, making a significant dent in your bottom line. Go through your outgoings with a fine tooth comb: where could you be saving money? For example: using recycled printer cartridges and refillable photocopier cartridges are not only environmentally friendly measures, but also money-savers.

Could be claiming back tax?A recent survey of SMEs carried out by LowendalMasai, found that 55 per cent of those eligible to claim R&D tax relief were not doing so. Go to www.hmrc.gov.uk/randd and ensure that you are making full use of your R&D tax claims.

Play hard ball with suppliersChallenging the existing suppliers to offer you a better deal can cut your shopping bills by as much as 35 per cent. At the same time, it can force them to be proactive in finding new solutions and cutting costs – savings they can pass on to you.

Desks and chairs…Try to negotiate a lower price for any business or office equipment you purchase. Ask for 10-30 per cent discount. In the current climate, if people think they are going to lose business, they are more likely to extend a discount. You could save around 5-15 per cent on your company’s fixed costs.

Save energySimple "Switch me off" posters can instil a cost-conscious approach in employees, prompting them to switch off monitors and shut-down computers at the end of the day. This can bring in £50 per computer in cash savings, cutting your energy bills.

Chase up oustanding invoicesOne of the major culprits increasing working capital costs is receivables. Businesses in the UK tend to delay the payment of invoices by 13.6 days on average over and above payment terms. A clear payment term policy and effective collection methodology can save you interest costs, bring in high-value cash and, sometimes, even earning interest: late payment legislation entitles you to charge interest on overdue payments.

Redundancy alternativesYou can escape the derivative of R-word, redundancy, by rescheduling potential redundant employees to do part-time work, shift work or, in worst case, freelance working to balance the workload.

Embrace open sourceOpen source alternatives can cut down on your software expenses significantly. Today, the software costs much more than the hardware it runs on. By embracing open source, you not only get some of the best solutions but also save big money.

Call your landlordRent costs account for a large percentage of business expenditure. The current economic climate provides a good time to re-assess your lease terms and conditions. Consider re-locating to a cheaper office space or alternatively setting up your business from home.

Chill outIncreasing the office thermostat by just one degree increases heating costs by 8 per cent. Keep the temperature in the office environment constant to reduce the heating bill.

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