BUSINESS ADVICE • 23 JULY 2021 • 8 MIN READ

Top 3 Tips for increasing your business profit

SECTIONS

Use technology

Review 3 expense codes in your business

Cut your wages bill

Beany has released its top 3 tips for increasing sales so let’s look at the other side of the equation – the top 3 tips for decreasing your expenses so you can make more money.

Use technology

There is so much software out there now to help you be more productive so invest some time looking for technology solutions. Think about the parts of your business that take up your time and which don’t lead directly to income such as chasing debtors, sending out invoices, recording your time, clearing emails or marketing to new customers.

Even if you think you’re a technophobe, give this a go:

Identify the task that you hate the most in your business which takes up valuable time
Work out how much time you usually spend on this task and write down what you need to achieve

Example

Chasing debtors (I don’t know anyone who enjoys this). This takes 2 hours per month, bad debts put your business under cash flow pressure and you end up with a chore that you put off. You want a painless debtor collection system.

Google debtor collection software and see what pops up as a solution. Budget to spend one hour researching all the options – often you can have a free trial to see if it works for you
Implement the change
Feel smug that you’ve found a tech solution that takes a headache away and brings more money into the business

Review 3 expense codes in your business

Often cost just starts to add up in your business. You’re busy in your business and not watching every payment or invoice and several things can happen:

You keep paying smaller accounts, even though you know they are not providing any great service for you, but it takes too much energy to review and cancel smaller amounts
You’re paying too much for some goods and services because you feel loyal to a supplier, or it’s takes too much energy to review
Better solutions have come along but inertia is keeping you with the same old solution

So pick a rainy day and if you’re good with your accounts, pick any 3 expense codes and look at all the transactions for one quarter. If you don’t feel confident about finding this information, there are two opportunities here. First, ask someone to teach you where to find the information and then second, look through all the transactions.

Make notes as you go about any improvements that you can see (I guarantee you will find something!)
Budget some time to make the changes
Do it!

Cut your wages bill

This is not an invitation to fire people or cut wages for individuals! Many businesses are constrained by how many good people they can find. This is a tip around using the good ones you have to better effect.

Inefficiencies can creep into businesses, even with the best people. We get comfortable doing the same processes and then it becomes hard to change them.

This is all about creating more productive systems for your good people to work in:

Spend time with your key people, talking about where they spend the most time, what frustrates them and if they have any suggestions for change. Usually the people doing the work have the best idea about how to improve things.

Write down the changes they have suggested and review them – do they make sense to you?

If the answer is yes, empower change in your team. Let the person who suggested a change, lead it, with your support.

Set a target for improvement, say 5% less time on a task.

Make sure you have some way of measuring the improvement so that you (and your team) know when it’s achieved.

Celebrate with morning tea and after work drinks and thank whoever came up with the great idea! Hopefully this will encourage others to come up with their own great ideas.

Example

In Beany, we used to have a tax summary and a management letter to our clients. Both documents took quite a bit of time to prepare and upload. We had always done two documents so we kept doing it until a new team member said “Why don’t we include the tax payments information in the management letter?” Seemed rather obvious when someone pointed it out! So we amalgamated the two documents and saved 20 minutes per job

Who are Beany?

We’re an online accounting firm that is always right here for you, your accounting pain relief. The most advanced technology lets us work way more closely with you than a normal accountant world.

We have a dedicated team of certified accountants and a support team to take care of your business no matter where you are, so you can focus on growing your business. We take out the ‘fluff’, break down the barriers and get things done. Looking out for you is what we are all about. Get started for free today.