We all know we need to watch what we spend, but when it comes to your business it is not always easy to control your costs when you are focused on doing your day job. There are two types of costs for businesses: variable costs and fixed costs. Variable costs depend on sales as well as supplies such as stock, postage, delivery costs, packaging, and others. Fixed costs are generally always the same; they are for set amounts such as accountancy fees, bank fees, monthly bills such as electricity and rent, etc.
To know how much you are spending, and to keep track of your costs, it is best to write them down, so you know the exact amount spent per day, week or month. After you have your list ready, go through each cost, and see if you can find possible ways to reduce them. Don’t think that any saving is ever too small, the sum of all parts can add up quite quickly your business could be saving lots of money in the long run.
Some suggestions for specific points which you could think about:
- Finding cheaper utilities providers
- Changing bank to look for terms and offers that might be more favourable to your business
- Think about what other providers you use – many, like AIMS, now also charge a fixed monthly fee
Reducing variable costs can be much trickier, especially where they are costs directly associated with your business:
- Try to negotiate some of your highest bills down
- Find possible discounts by buying in bulk
- Always ask for a discount – what the worst that can happen?
- Scrutinize your costs and try to eliminate some which can be unnecessary
- Are there any of your variable costs you can move to fixed – at AIMS we charge fixed fees agreed in advance for accountancy work, so what was variable can become fixed!
Overall, what that gives you the opportunity to do is to have more available cash at the end of the month, make more profit, and improve your business’ numbers.
Henry Ejdelbaum, MD, comments “The main benefit of putting your business’ costs under control is to lower its overall expenses, and keeping more money instead of it going out the door. Cost control is a key factor to maintain and grow profitability.”
We help our clients look after their books so that they can focus on doing what they do best, running their business.
Johan Da Silva
AIMS Accountants for Business
020 7616 6634
Notes to editors:
About AIMS Accountants for Business
Established in 1992 to provide SMEs a fixed fee service, free of any obligations, through franchised accountancy practices. For nearly 30 years our success has been driven by our singular client focus, our proven management systems and the ongoing support and training provided to all AIMS franchisees.
By doing more than just crunching numbers, by providing business advice and creating a solid relationship with our clients, we provide the services that has seen us become the only nationwide network of qualified accountants in the UK.