As you start growing your business, you will undoubtedly find some considerable increases in your expenses. Consider these smart but simple strategies to keep your overhead manageable.
1. Automate Select AP Functions
Serving more customers or stretching your reach geographically may make processing your accounts payable a more time-consuming proposition than it had previously been. Consider automating accounts payable tasks to minimize the amount of time and effort that you and your staff have to invest in paying invoices every month. Equipping staff to use time efficiently can spare you from making additional hires that are ultimately unnecessary or prevent you from making more value-adding expenditures.
The idea of automatically paying vendors and service providers might be off-putting to business owners who have dealt with billing disputes. Usually, successfully disputing a bill is more easily done before you’ve paid it.
Keep in mind that you can withhold certain invoices from accounts payable automation software. For example, you probably want to personally review invoices from contractors for project-specific expenses to ensure that the work was performed correctly. Likewise, you may want to avoid automating payments on expenses that vary considerably month-to-month so you can find out about what has changed when bills go higher. The best application for this type of software is to pay expenses that remain fairly static every billing cycle.
2. Audit Energy Usage
Your monthly electric bills are a good example of recurring costs that can fluctuate dramatically. Some of the variation may be attributable to seasonal spikes in your usage patterns. Heating and cooling costs, for instance, can change considerably during different times of the year. However, errors in this type of billing can occur with surprising frequency.
In fact, some businesses might be getting overcharged by utility providers for years without failing to realize it. Some mistakes can be insignificant, but others could represent thousands of dollars every year or even every quarter depending on your typical usage. Professional utility auditors can assist you in identifying irregularities in your utility bills and getting to the bottom of what’s going on. Singling out problems can be difficult to do independently because it’s hard to know what to look for. Professional auditors know exactly where to start looking because they are well-versed in the most common types of issues that affect meter readings and account mixups. If you have to initiate a dispute with a utility provider, having a third-party professional’s findings to support your position could be a big help in addressing a billing problem and getting a meaningful resolution.
3. Become More Energy Efficient
Targeted measures to make your operations more energy efficient is another important way to moderate expenditures on basic utilities. Energy costs have been rising for commercial and residential customers throughout much of the country. Moreover, businesses are facing mounting pressure to reform their energy usage in order to operate more sustainably. Unfortunately, the vast majority of energy suppliers still rely on production methods that produce carbon emissions. Becoming more energy efficient gives you an opportunity to reduce your company’s carbon footprint.
Because heating and cooling costs tend to represent a significant portion of energy usage in commercial spaces, arranging for a professional inspection and performing preventative maintenance on your HVAC system is a great place to start. Regular cleaning and calibration helps to keep systems running like they should. Installing insulation to cover the exterior of ductwork is another good tactic to enhance a system’s efficiency.
Lighting your operating space inefficiently could also drive up consumption. Consider using motion-activated lighting to avoid leaving lighting fixtures on when they don’t really need to be. Always use LED lights rather than fluorescent or halogen models. They last longer and use a lot less electricity.
Scaling up your operations means spending more, so you need to plan strategically. While ramping things up will also help you generate more revenue, it is especially important to make an effort to control how much you spend while you are still working on growth-oriented initiatives.
