It’s no secret that cost control is a critical component of the operation of any successful company. However, implementing those measures can be challenging. The best thing any finance team can do is focus in on the key areas that influence company spending. Here are a few critical areas that will impact overhead expenditure the most. If you get a cost control measure strategy ironed out early on, your company is more likely to thrive in any economic climate.
Cost Control Measure #1: Use Cloud Computing
With cloud computing, you only pay for the resources that you use. Meaning, there is no cost for underutilization because you don’t pay for what you aren’t using. Rather, your cost is based on gigabytes, processing power and storage space expended. So, it is no surprise that many businesses have found leveraging cloud services instead of purchasing their own servers to be beneficial. With cloud services, management, maintenance, and operating costs wrapped into one monthly fee and, paying for the processing power used instead of a server’s capacity, money will be saved in the long run.
Cost Control Measure #2: Hire the Right Employees
The hiring process is likely one of the most critical areas for maintaining cost control. A bad hire is expensive and can detract from the overall goal of the company. Recruiting, interviewing, and thoroughly vetting new hires should be done so in a systematic way. According to recent research, managers spend more than 10 hours per week coaching underperforming employees. That is a significant portion of the workweek where productivity isn’t at its best. Not to mention, a bad hire can influence company morale and impact the bottom line across the board.
Cost Control Measure #3: Build Quality Relationships with Suppliers
In order to control costs, you must stay on top of your expenses. The best way to do this is to maintain a good relationship with your suppliers. This means paying your invoices on time every time and working through any kinks as early as possible. Not only will this save you money by not paying any late fees, but it will strengthen your relationship with the supplier. This type of bond will be necessary when it comes time to negotiate contracts. If your company is easy to work with, it is more likely that the supplier will offer you a better rate to keep working with you.
You may also enjoy, Cost Control Tips for Business