As the road to an economic recovery continues, businesses are slowly picking up trade even with the restrictions being lifted on the 19th of July. However, there is still an element of saving money and reducing further costs that they originally incurred during the peak of the pandemic with the lockdowns etc. So for this very reason with many businesses, money is tight and here is our list of top 5 ways businesses can reduce their costs.
Review your Bank Account
This may seem like common sense but truthfully, a lot of businesses fail to spend the correct amount of time reviewing their bank account themselves. When they get notified about a drastic change to their account, they start spotting some common errors that are too late to change. Common errors that ideally they should’ve noted when reviewing the account in the first place. Not only this but, existing banks are still wanting to get new and existing business owners onto their free banking accounts. By reviewing these details and your bank’s account fees, changing it to a fee-free business account can save you potentially thousands over the course of a calendar year.
Reduce your Energy Bills
Another obvious step, but we mean this in two different ways. The first way is the more clear method of making sure the lights and all other electric appliances are turned off when the business isn’t open. An efficient alternative could be to opt for more sustainable energy providing. This could be the fitting of an LED light bulb or even adding solar panels to the roof of your building to help supply energy-efficient electricity. The other way to do this is to look online for different gas and electricity suppliers. There are plenty of websites such as ‘money supermarket’ that can help you move suppliers with relative ease as research suggest that you will find better deals with other providers instead of renewing with your current supplier.
Reduce/Clear your Credit Card Debt
Some might say “easier said than done” but this is arguably one of the most critical steps. No one individual or business wants to have a credit card that they are constantly having to pay back. Most business credit cards charge at least 16% interest per year and the best way to solve this issue is to use pay off your credit cards using any excess cash you may rather than saving and having the outstanding debt continue. It’s important to note that there are deals where you can open a new credit card account and use the balance transfer facility.
Use a Good Accountant
Why give yourself the headache of working out your balance sheet yourself when you can hire a qualified specialist whose day-to-day job is to work on a company’s finances. As a company, you want to ensure all your tax bills are kept down to the minimum and a good accountant is someone who will know what type of allowable expenses can be legally deducted from your accounts each year to minimise your tax liability. Whatever the accountants do, will ultimately depend on the type of business you are in. For example, if you’re a sole trader it might be worth checking if you should opt for a limited company where you pay dividends that are free of national insurance so you could legitimately (and legally) save this expense also.
Look for Alternative Insurance Products
Opening a business without insurance is the single riskiest thing any owner would do. It’s mandatory in the UK to open up a business with the employer’s liability cover which is a legal requirement for any company that employs staff (regardless of contracted hours). So this is an added expense to the company, (albeit a very important expense) but you can still find a cheaper solution. It is a similar policy to what we discussed with the bills supplier where you have an option to explore alternative insurance products as you will find a cheaper insurer rather than constantly renewing with the same one each year. It is important to note, however, that each insurance provider has specific details with its excess values and what it covers exactly, therefore look for the providers who cover ALL parts of your business. Avoid the cover schemes that aren’t necessarily suited to your company with what it specifically covers.