How can your limited company save on costs?

As the costs of living are increasing, our clients have been getting in touch and asking us how they can save costs of running their businesses.

This blog is written to give you some ideas of common ways you can save costs.

Here are some of the ideas of how your SME company can save costs:

1. Negotiate better rates with suppliers: If you have been using the same suppliers for a long time, it may be worth negotiating better terms or prices to reduce costs.

2. Use energy-efficient equipment: Using energy-efficient equipment and appliances can help to reduce your energy costs, especially with energy prices at record high levels.

3. Use cloud-based software: Rather than purchasing and maintaining expensive software licenses, consider using cloud-based software which can be subscribed to on a monthly basis. This can include bookkeeping software. If you have an accountant, they can usually get this for you at a reduced rate by purchasing the subscription on your behalf, this can result in as much as 20% reduction in costs.

4. Automate processes: Automating repetitive tasks can help to reduce the number of staff required and save on labour costs. This is more time-consuming to implement and may involve initial investment.

5. Outsource non-core functions: Consider outsourcing functions that are not central to your business to specialised companies. This can help to save on costs associated with training and maintaining in-house staff. For example, did you know there is a big trend with UK accounting firms outsourcing their bookkeeping, accounts and sometimes even tax preparation to other countries?

6. Reduce unnecessary expenses: Review your business expenses regularly and eliminate any that are not essential to the operation of your business. You will be surprised how many businesses we encounter that have direct debits set up for subscriptions they are no longer using or haven’t been for years.

7. Implement a remote work policy: Allowing employees to work remotely can help to reduce overhead costs such as office rent and utilities. This has become a big trend during Covid and is here to stay now.

8. Use free or low-cost marketing channels: There are many free or low-cost marketing channels available, such as social media and email marketing, which can be just as effective as more expensive options.

9. Buy in bulk: Buying larger quantities of supplies can often lead to cost savings through bulk discounts.

10. Take advantage of government grants and funding: There may be government grants and funding available for businesses in certain sectors or for businesses that are taking steps to become more environmentally friendly.

11. Use a virtual receptionist service: Rather than hiring a full-time receptionist, consider using a virtual receptionist service to handle calls during business hours.

12. Use open-source software: Rather than purchasing proprietary software, consider using open-source alternatives which are often free.

13 Rent, rather than buy: If you only need equipment or resources on a temporary basis, consider renting instead of buying to save on upfront costs.

14. Use a shared workspace: If you don’t need a dedicated office, consider using a shared workspace which can provide access to facilities at a lower cost.

15. Negotiate with landlords for lower rent: If you rent your business premises, consider negotiating with your landlord for a lower rent.

16. Use a parcel forwarding service: If you sell products online and ship internationally, consider using a parcel forwarding service which can help to reduce shipping costs.

17. Use a freelancer or contractor: Rather than hiring a full-time employee, consider using a freelancer or contractor for short-term projects.

18. Use public transportation or carpooling: Encourage employees to use public transportation or carpool to work to save on transportation costs.

19. Switching accountants. Have you been using the same accountant for years? Are you happy with the service? If you are then you should stay because finding a good advisor that suits your business needs can be difficult. But if you have not been happy, you should know that switching is as easy as changing an energy supplier. Most of the time as a new client you will get a discount and possibly a better service.

This is not an exhaustive list and there are many other ways a business can save costs.

At Finanche we have qualified accountants that each year when preparing the accounts for their clients will review their expenses and income and provide relevant business advice. We provide a more individualised service and will always work for you to save cost and tax at every step.