Overhead costs are expenses related to running your business on the daily basis, such as office rent, utilities expenses, equipment, insurance, wages, administration, repairs and maintenance. 

By monitoring your overhead cost effectively will give your business a better chance to stay competitive in the business world.  End of financial year is coming up, it’s a good opportunity to spend some time and review where you can cut back on overhead expenses.

There are several ways you can cut back on your overhead costs.

Rent: Try to negotiate with your landlord to lower your rent, you can consider moving to a less expensive premise, or you can consider subleasing space with another business. Dependant on your business type, you might be able to run your business from home.

Utilities – power, water, telephone, internet:  look for ways to reduce use and review plans on an annual basis to see if there are alternate options, by switching to a lower cost plan, will save you money.

Insurance: It’s essential for the business to have insurance coverage, including property insurance, general liability insurance, and business interruption insurance.  Review your insurance policy once a year, you might be paying for coverage you don’t need.  Shop around for quotes, compare pricing and try to negotiate with your current provider for a price match or switch to another insurance company.

Equipment: Instead of purchasing equipment and motor vehicle upright, leasing can be less expensive over time, shop around to find the best option for your business.

Wages, Administration Cost: The easiest way to reduce wages and administration cost is to cut back on staff.  Look into outsourcing your bookkeeping and administration, you pay for professional service you use and will also increase your productivity.

Maintenance and Repair: Many times, there are things to be maintained and repaired. If some of your equipment needs to be repaired too often, you might consider upgrading to a more fuel-efficient vehicle or a latest equipment.  It will save you time and money on the long run.

Go paperless:  Change is always hard, however there are often substantial long-term savings. Switching to a paperless system, will lower your printing and related supplies costs, plus efficiency also tends to improve, which results in savings in time and money.

Reducing your overhead costs will take time. However, this time when used efficiently will lead to a smoother operation in your business, more profit and better cash flow. Implement these strategies for lowering your overhead costs and put your business on the path to financial success!

Let us help you to review your overhead costs, contact us on info@ejsaccounting.com.au and start saving!