Most companies can save about 20% on expenses if they know where to look. If you have vendors you know and trust you might not want to switch, and you probably don’t have to. In our experience, you can get more favorable terms from your existing vendor more than 85% of the time.
For example, you may have used the same health insurance provider for years. You’re happy with the benefits they offer for your employees. Perhaps your office equipment vendor fits your operational needs exactly. There’s a good chance that there is money to be saved, without changing your relationship or your quality of service.
If your vendor relationships are good, consider the contracts. When was the last time you reviewed them to be sure they were the best terms? Sometimes a few critical updates to a contract can make it work better for you and the vendor. Mismatches between how you use a service and how you’re charged for it can be costly. We recommend considering multiple elements when looking to optimize your expenses and your service
If you’re looking to save expenses, we recommend these five strategies to ferret out savings. Our cost reduction strategies are rigorous but well worth the effort:
Process, system, or technological improvements
Look at how processes & procedures can be made more efficient. Simple things like switching from weekly deliveries to monthly – or vice versa can save a lot of money. Do you batch things for processing or send them one at a time? This saves money and increases productivity. If you have multiple locations, you can aggregate your energy usage to get better pricing rather than pricing each property separately.
Review how products and services are used. Sometimes changing your habits around a certain resource can have a significant impact on the billing rate, possibly improving the value you get from it. IF you combine usage with your wireless accounts and share data usage rather than each line having its own unlimited usage can save you 22% per month on average.
Correction of billing errors
Identify and correct billing errors, then request credits. We have seen examples of unintentional errors costing thousands per month. Our blog on “The Trouble With Jargony Contracts: Worker’s Comp Premiums” from March is a perfect example of how a company was being accidentally overcharged on its insurance premiums. We were able to save them millions by recognizing a technical error in their billing rate.
Elimination of overcharges and/or unnecessary services:
You can eliminate waste by identifying what you actually use and what you actually need. This is simple. Many contracts – especially technology contracts bundle services. If you aren’t using them, your bundle isn’t really saving you money. Additionally, today you can option for flat rate pricing for a host of services rather than hourly billing by services provided.
Rate reductions from current providers
You should check that the price you’re being charged by your current provider is competitive. Industry standard rates change. Ideally, we recommend reviewing contracts annually to make sure you’re getting the most favorable terms available.
Are you ready to start reducing your business costs?
There you have it – those are five strategies you can employ right now to reduce your business costs.
If you’re short on time – and let’s be honest here, we’re all short on time – you’re also in luck. The only thing you need to do to cut your costs is to send one email. We’re not joking; we’ll handle everything for you. We also work with vendors in dozens of categories, so we can find you a better deal and a better vendor too. If we can’t cut your costs, you won’t pay.
Published by Marc Freedman
Marc currently serves as our Chief Cost Evaluator, expertly advising our client management team on how to help you successfully achieve your business and financial growth goals. A respected mentor to all he consults with, he is an avid collaborator and contributor to the spend consultant community, guiding thought leaders to formulate, design, and install the best operational solutions available to their clients.