Top 20 cost-saving tips for businesses

20 March 2014

1. You should set up a daily cashflow to control all cash in and out. This may protect you from wrongful trading, as it helps manage cash and stops bounced cheques. If you don't have a daily cashflow forecast, please ask for KSA’s free model (PS don’t bounce cheques it's bad form!).

2. All purchases are approved by you as MD/FD/Operations Director/Owner. You should sign all cheques or approve all BACS/CHAPS payments in writing.

3. No purchases are approved unless signed by you, which will make “them” produce a purchase order. Then you can check if they are doing their job, is the price fair, are they and your supplier ripping you off, or are they just lazy and not getting the business best value?

4. No petty cash is drawn from the bank unless you personally go and get it… makes you question what every pound is spent on when people ask for cash. If not possible because your business is too big, why not make a trusted person do it. NOT a big issue if cash is king?

5. Review all expenses claims by the staff; reject all that are not really necessary. If you get complaints or murmurings (they may be too scared to act professionally and debate with you), then meet with them and explain the position. Bluntly, tell them survival is now the main aim.

6. Remember survival is key, if you lose people or profits that’s not vital, cash is king for now. Profits will soon flow from very tight cashflow management.  If people sue for unfair dismissal, call us and we can help - we may be able to kill off their claims with straight talking. Or perhaps a CVA can kill these claims too.

7. Ask every supplier for a review of their prices, can they cut you a better deal? Ask them to for a few extra weeks payment grace. They may object but they will welcome smart business people staying in business. That’s better from a creditor’s point of view than people putting heads in the sand!

8. Ask the landlord for a breather on rent. Can you please pay monthly not quarterly for a while? This helps cashflow. It actually puts you in arrears but that’s maybe OK at this stage. Again they want a paying tenant, not an ostrich who won’t talk.

9. Ask your accountants to accept monthly payments. If your accountancy fee is £10,000 pa, then ask to pay over say 10 months that’s £1,000 per month. The same applies for anyone else that issues a big annual fee note.

10. Manage cash every day!

11. Get someone else’s view; do you have a trusted friend? If so talk to them about your business, actions and get them to sanity check you. They may suggest cost savings, test your closeted views and make you think about changing ways.

12. Do you need that company car; can you use your own and give it back?

13. Can you sell any assets, will it raise cash? Make sure they're not owned by a leasing company first.

14. Ask your factors to cut their costs, only drawdown weekly. Using your daily cashflow model will of course help with this.

15. Cut all overtime to the bone, why do you need it? Is your production planning so poor or weak? If you need more people hire them, at lower rates.

16. Did we say “Manage cash every day"?

17. Use the internet to buy or price everything; you can get fantastic value over the net.

18. Work all hours, to build the recovery plan and set out the Time To Pay Deals with TAX AND VAT.

19. Keep minutes or notes of all decisions. If you’re a partnership or sole trader, keep notes!  This will help protect you.

20. Finally be aware that people will be less organised than you - if a customer is not paying, find out why!