In this guest post from Reducer, we look at simple, effective ways to reduce your overheads.
For many business owners, opening up the latest bill that’s been popped into their pigeon hole can be the bane of their existence. From confusing charges to overdue invoices, it’s easy to bed is heartened by expensive bills that put pressure on cash flow.
But your bills don’t have to be so expensive.
There are plenty of ways to reduce the cost of your business invoices that don’t risk upending your busy schedule. Though some costs are inescapable - such as core services like electricity, gas, and water- by changing your habits, becoming more efficient, or finding a different supplier, you can minimize your spending and focus your cash elsewhere.
To make the cost curation process a little easier, we’ve compiled five key tips to point you in the right direction.
When looking to minimize costs, reducing usage is always the most obvious place to start. The good news is there are both small and larger changes you can make that can have a real impact on the cost of your bills. Often, getting your team to develop some simple new habits can offer plenty of savings on your electricity, gas, and water bills.
To reduce electricity usage, you can start by unplugging appliances when not in use - a standby saver will allow you to take appliances off standby all in one go. Similarly, lights should be turned off when there’s no need for them to be on. Take advantage of natural light, switch to long-lasting LED light bulbs, or invest in a motion sensor to minimize electricity wastage.
Reducing gas usage requires you to rethink the way that you heat your business in colder months. A quick fix is to turn down the thermostat by just one degree, a change that the Energy Saving Trust claims will save a household £60 (€73) a year. Translate household gas bills to commercial prices, and the amount you could save your business each year is astounding. In the longer term, draught proofing and insulating your premises will reduce the need for gas usage, but will require an upfront investment first.
For your water usage, turning off taps when not in use or installing water efficient cisterns in toilets will see cuts. You should also watch out for leaks or faulty taps which can cause spikes in your bills if undetected.
Low usage is usually great for cutting down on your business costs. But seeing low usage on your bill when you’re paying for a minimum service? Not so great.
For services such as broadband and telecoms,your business will need to pay a minimum charge as per your contract. This can leave you paying for more than your business is actually using. For your broadband, perhaps you’re on an unlimited usage service, but are only using 23GB of data per month. Opting for a service with a lower threshold (once your contract allows) will lower your costs without affecting the service you receive.
Alternatively, for your gas and electricity services, you could opt for smart metering. This ensures that you only pay for the energy your business premises uses, with automatic readings being sent straight to your supplier. If your business isn’t on a smart meter, then you’ll be paying estimated charges unless you’re manually submitting meter readings when requested.
Estimated readings could mean that you’repaying far above the value of your actual usage, especially during periods where you may not actually be in the office.
Going paperless may be a little more surprising than some of our other tips, but there are several reasons that heading towards a digital workspace offers a chain of benefits in reducing the cost of your bills.
First, some companies include an extra charge for issuing paper bills - if you consider how many services you buy and how often you receive a bill in the post, this cost can add up substantially.Opting for digital invoicing eliminates the need for this charge.
Reducing paper usage in the office will also have an impact on the amount of waste you produce. Perhaps you pay for your waste on a “per bag” basis - use less paper, use less bags. Or maybe you have a weekly bin collection - if the elimination of paper in the office cuts down waste by half, then a fortnightly bin collection may suffice. Both of these options would reduce the cost of your waste bills, leaving you with more cash to spend on more important things. Not only is this cost effective, but going paperless is also great for the environment. It’s the perfect win-win.
An extension of going paperless, digital invoicing can also play a part in the cost-reduction process by opening the doors to thousands of insights on your core spending habits. Using an automated data entry solution such as AutoEntry contributes to bill reduction by collating all the information you need to understand how much you’re paying for the services you use. This allows a cost-management service like Reducer to pull the data from your invoices and compare prices to hundreds of suppliers,revealing where you are overspending and likely to make savings if you switch.
Switching suppliers can be a concrete way of paying less for your core business services by reducing the rates of services you are already using. With hundreds of suppliers on the market and 80% of businesses overspending on their energy bills alone, it’s likely that there are savings to be found on at least some of your business spend.
Switching suppliers is particularly important if your business is currently on out-of-contract rates; if your busy schedule has left you with little time to pay attention to your suppliers, you may have been auto-renewed once your contract has expired. This often leaves business consumers paying outrageous prices for services they could be buying cheaper elsewhere. For gas, we’ve seen businesses paying quadruple the average market rate for staying loyal to their supplier without taking a careful look at their contract.
You could negotiate with your current supplier,but comparing a range of others is best practice for ensuring you’re on the best contract to reduce your bills and have peace of mind over your spending.
Begin by collating a list of each service that your business buys, so that you can spot where you’d like to make savings, and then begin either finding ways to be more efficient, or comparing suppliers to find a better deal.
The process is made a lot easier when you have digitized your accounting or business practices, as you’ll have more access to the information and insights you’ll need at the click of a button.
If you find that switching is the right course of action, then follow the four step method: collect, compare, negotiate, and switch. From then on, you won’t be so disheartened when you’re notified of your latest bill.