It may not be a new financial year for your business but there is no time like the present to take a little time to review the costs of your business. Do you know what your costs really are?
Here are three areas of your accounts which it will probably be worthwhile to review:
1. Make a list of the regular direct debits and standing orders going out of your bank account. Do you know what each one is for? Do you know when it started and when it finished? Is it a regular payment that you need to continue for your business or should it be cancelled? Finally add up all these regular costs. Are you surprised at the total? These regular costs are generally the overheads of your business and you need to be able to cover these with the profit you make on your sales.
We provided one of our customers with a list of their regular payments and they suddenly saw costs which should have been stopped and others which they really didn’t need. It only takes 5 minutes to look through your bank statement for one month and check what you are paying for.
2. Check the costs of the services you have. Are the costs on your telephone bill what you expect – line rental and call costs – or are you paying for an additional service such as caller ID or a call package which you don’t need. Call your service provider and see if you are receiving the best deal for the service you need as they can often suggest a better package. Check your electric and gas bills. Are you on a fixed contract and if so have you noted the date it ends as you will have to give one to three months notice if you want to change provider. If you are not on a fixed contract check the price you are paying and get a quote from two more providers to see whether you can make a saving. Some providers will give you a rebate if you switch both services to them and many now offer a discount for paying by direct debit.
I recently checked the costs on my telephone bill and found that a call package had been added to a phone line which is not used for calls. It took several weeks for BT to check it but a refund of 3 years worth of the call package was definitely worthwhile.
3. Take a close look at the running costs of your business. Do you need every one of these costs? Are you paying for software or a service you are not using? Add up every overhead you have in a month or the average over a quarter if some of your costs aren’t incurred every month. This will include staff wages and your own wages. This total is the amount you will have to cover each month if you didn’t have any sales at all. The costs you are totalling are not the costs of what you sell but the running costs of the business.
Do something different and take a little time this New Year to check out the figures in your accounts and if you are not sure where to start ask someone to go through it with you. This review will ensure your business remains healthy.