Most businesses are constantly trying to reduce expenses but fail to go about it in a methodical way. As a result, as with most exercises that are not well planned, insufficient focus leads to missed opportunities.
One very valuable aid to reducing expenses is to utilize and frequently review checklists, on a regular basis and by more than one staff member. Five checklists covering different areas, rotated and reviewed by five senior managers/executives, once a year ensures that every manager provides a healthy blend of new queries and ideas in each area of the business. I also believe that it is helpful to set the expectation that each manager come up with at least one idea that will save money.
Developing those checklists is laborious and so I suggest that you use an excellent book “Cash Management Toolkit” by Jeffrey D. Sherman. The book comes with a CD which includes the following checklists already in Microsoft Word. In this way you can easily use and modify them for your business. (The book is published by the CICA and is available from http://www.castore.ca/Catalogue):
Shipping and freight
Mail and courier
Legal, accounting, auditing
Occupancy (rent, utilities)
Add additional checklists that address the specific needs of your business. There is no better time that the present to methodically review the expenses in your business to ensure that you are taking advantage of all practical savings.
James Phillipson is a Chartered Accountant and a Principal of Mastermind Solutions Inc. with over twenty years experience in large and small businesses. He has provided financial counselling to his clients since 1996, often in the role of or as a coach to a Controller or Chief Financial Officer. James has experience in financial roles in a wide variety of businesses and industries.
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