7 Expenses Every Enterprise Can Eliminate Today
Running a business requires skills such as leadership, ingenuity, and the ability to balance a budget. The latter of these can be particularly challenging, though — especially for enterprise-sized businesses that face high administrative costs and liabilities. If you’re a CEO or business owner, you can reduce costs by identifying and eliminating unnecessary expenses. Consider the following seven items that you can likely cut from your company’s budget.
1. Accounting Department
If your company has its own in-house accounting department, you might be surprised by how much you could save by outsourcing this function to a managed accounting service. This type of service connects your company with a fully functional accounting department that handles all of your business’s financial transactions and payroll. This includes tasks such as handling accounts payable, accounts receivable, and transaction coding. Outsourcing accounting can also mitigate the liability your company faces.
2. Workers’ Compensation Administration
According to statistics, there are approximately 4.9 million workers compensation claims filed every year. This represents a major loss for businesses, and if a claim occurs, the expenses will only continue to accumulate. One component of these expenses is the cost of managing pharmacy benefits for injured workers. Contracting a pharmacy benefit management company is one of the best ways to mitigate this expense and streamline the workers’ comp process for employees. A PBM provider works on behalf of your company to connect injured workers with the pharmacy benefits they need as they recover from their injury.
3. In-House Human Resources
Experts recommend that any company with more than 50 employees should have a designated human resources representative. If your organization has this many employees or more, you may need several HR personnel to helm your department. Rather than hiring HR professionals internally, though, you can eliminate this expense by enlisting help from an outsourced human resources service. These providers offer all of the services that your in-house HR would provide, but at a fraction of the cost. To establish this relationship, your company will typically enter into a contract with an external HR organization.
4. Physical Office Space
Remote work is more popular than ever, and it’s just as advantageous to employers as it is for workers. If you’re still paying a premium to rent an office space for your employees, you’re likely wasting a significant amount of money. Transitioning to a virtual workplace can eliminate the cost of office space and reduce your spending on supplies and utilities, too. In addition to these benefits, research shows that remote employees are 13% more productive than their in-office peers.
5. Extra Employees
Laying off employees is always a difficult decision, but sometimes it’s a necessity for the long-term sustainability of a business. You can eliminate the expense of extra employees by surveying your staff roster and identifying any positions that may not be necessary. In many cases, you can replace employees with contractors or freelancers who do the same work on a temporary basis. This is a wise move for positions in marketing, design, or social media management, which may have fluctuating workloads. Working with a freelancer allows you to adjust your spending based on your company’s needs.
6. Outdated Technology
Many companies mistakenly view tech upgrades as an expense. While it’s true that software updates and new devices may initially be costly, you should consider the price of sticking to outdated tech. If your company’s technology causes delays and interruptions during the course of daily operations, it’s likely costing you more in revenue than it would cost to upgrade to a better system. Look for technology that’s tailored to your industry and invest in the tools you need to improve business operations.
7. Ineffective Marketing
Marketing is a major component of nearly every company’s success, but if you’re pouring money into campaigns that don’t make an impact, you’re wasting your company’s resources. In a worst-case scenario, ineffective marketing may even compromise your brand’s image and integrity. It’s essential to invest in marketing that aligns with your company’s goals and reaches the demographic you want to do business with. To this end, you should assess your marketing budget to identify any areas you may be able to eliminate costs and reinvest them in efforts that will do more for your business’s bottom line.
Cutting down on costs is a difficult process, but it’s important if you want to invest in the sustainability of your business. Addressing these seven expenses can help your company thrive and shed the burden of unnecessary spending.