We are all familiar with performance reviews for staff, whether we like them or not, whether we do them or not but how often do you do a thorough review of the business?
Reviewing the business can be a review of processes, are they still efficient? Is there a better way of doing things? Can technology assist? Do you even need a process anymore? All very valid questions which can result in improvements, cost saving and increased productivity.
Expense review. Are you spending money on products, services and/or inventory which is unnecessary? Having reviewed processes, you may find by making the process more efficient or eliminating the process altogether, you no longer have a need for a service or product. If a person is no longer needed, can they be used elsewhere to good effect?
Expenses can be spending on stationery, utilities, inventory and a myriad of other things. Instead of having letterhead printed, can you email most of your correspondence? In which case a template in MS Word with logo, ABN, address etc. is all you need.
Utilities – can you go solar? Can you change light bulbs? Automated lighting, no activity, no lights. Can you regulate the heating? Improve insulation. Water usage can you invest in grey water?
Of course, when it comes to utilities it will depend on whether the business owns the property or whether it is leased. Even leasing, you can make it a renewal stipulation that utilities are improved.
Shop around for the best provider, unfortunately in Western Australia, there aren’t many options, unlike the Eastern States where you can at least choose.
Telecommunications though, present a lot of options, there are many providers to choose from and VoIP can make a huge difference, particularly with the NBN roll-out.
Don’t be tempted to buy in bulk, unless you are absolutely sure the bulk will be used in a reasonable period of time. If you have bought in bulk and you will retire before it is all used, you have lost out, oh and it will take up space. This is very important in relation to inventory.
Moving the office can also save money. If you no longer need the large office or vast warehouse, look for something smaller and cheaper. At the same time, you can look for premises which can save on power bills and other running expenses.
Part of the review of expenses should also include determining what you can claim as a deduction. This does change and the limits which can be claimed can change.
Just last year in the 2015-16 budget, where small businesses with an annual turnover less than $2 million could immediately write off assets they start to use or install ready for use, provided the asset cost less than $20,000. In the 2016-17 budget just handed down, this applies to businesses with annual turnover of less than $10 million.
As the deductions, limits etc. can be so variable, a good relationship with your accountant is one of the most valuable relationships to have. This could be another expense review to make, is your accountant keeping you up-to-date? Talking to you about changes which can positively affect your operations.
If not, find an accountant who will behave like a member of your team, who has your business interests at heart. They are out there and they can save more than money.