Leasing instead of buying
Using leasing to purchase vehicles and special equipment will help reduce tax liabilities.
For example, companies operating on the general taxation email lists uk ystem can very profitably use the VAT deduction on invoices from the lessor, and enterprises operating on the simplified system have the opportunity to reduce the amount of income tax depending on the amount of payments.
If you have to participate in a tender and require a certain amount of equipment for a certain period of time, you can avoid the costs of purchasing or using borrowed funds, which can sometimes seriously damage the financial stability of the company.
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Review your supplier list
It is recommended to create a database of reliable suppliers, which will help optimize your activities and ensure effective interaction with them. If the main partner does not cope with deliveries, look for alternative offers from other companies. They will be happy to help in case of force majeure.
Control of the wage fund
Don't forget to take care of your employees' salaries so that they can provide maximum productivity and not get paid for downtime. Consider introducing transaction-based payment and develop key performance indicators. You can redirect some employees to remote work and not pay for additional workstations.
Reduce office costs
Make a list of your administrative expenses, including utilities and business communications. Consider which ones you can cut.
For example, consider switching to a different service provider with better rates. Support employees in conserving resources. Monitor those who have a habit of leaving the lights on or not turning off the water.
Automation of production processes
Often, companies, seeking to increase production, increase their staff, but sometimes it is enough to simply review and optimize existing production operations, supplement stocks with equipment. Sometimes outdated work processes are not reviewed for a long time, although they are ineffective and unreasonable.
Automation of production processes
Source: shutterstock.com
Consider implementing automation to streamline workflow and reduce the need for human intervention. Check out the lean manufacturing section for more ideas and approaches.
Review your marketing channels
Study the effectiveness of each marketing channel in a crisis: Internet, radio, television, media advertising, flyer distribution, etc. Analyze the costs and revenues of each channel, eliminating those that require large investments but bring low returns.
Consider government support measures
Use available government support measures to increase resilience, protect business and company costs during a long-term period of economic difficulties. This includes loan deferrals, tax breaks and privileges.
Don't forget that you need to constantly monitor your company's expenses. Maintain financial records, reduce costs, and evaluate how much profit each ruble invested brings.
Download a useful document on the topic:
Checklist: How to Achieve Your Goals in Negotiations with Clients
Frequently Asked Questions About Firm Costs
Keep in mind that the desire to reduce costs does not necessarily have to lead to a reduction in the quality of products or services.
Impact of Costs on Revenues
If the price of the product remains the same and costs increase, the company will receive less profit. If costs and the price of the product increase proportionally, the company will not feel any changes. However, an increase in the price of the product may negatively affect demand from consumers, which will lead to a decrease in production volumes. By reducing costs and maintaining a stable price, the company will be able to increase its income and receive more profit.
Reflection of costs in accounting documents
All financial activity of the company is reflected in a special report called "On losses". This document is prepared using form No. 2. To prepare indicators for inclusion in the balance sheet, two main categories of calculations are carried out: direct and indirect. To analyze the efficiency of large companies and control key indicators, it is necessary to regularly enter data into accounting documentation.
What does cost inflation consist of?
When reducing costs, it is important to take into account their inflation. Increasing resource prices increases production costs, which leads to an increase in the cost of each manufactured product. As a result, the volume of production decreases, and a deficit occurs. Consequently, cost inflation inevitably leads to higher prices.
There may be a situation where instead of cutting costs, you decide to increase funding for certain areas. This approach will be justified if you end up increasing the efficiency of yo