Controlling costs - checklist

Controlling costs - checklistOur helpful checklist will show you the areas to target when you're trying to understand or reduce business costs.

  • Identify your major costs, such as staff, raw materials and other supplies, premises, utilities, travel, transport, capital expenditure and financing costs.
  • Decide which costs to control centrally and which should be the responsibility of individual cost centres (eg production, sales).
  • Involve employees by explaining what you are doing and encouraging cost-saving suggestions - consider offering incentives.
  • Establish cost budgets and monitor actual costs against budget as part of a systematic cost-control process.
  • Review how activities and costs contribute to achieving your business objectives and quality standards.
  • Benchmark key activities and costs to identify long-term opportunities for significant cost reductions.
  • Consolidate purchasing with a small number of suppliers and negotiate improved terms and discounts; check invoices for overcharging.
  • Eliminate unnecessary activities, duplication of effort and avoidable waste; reduce obvious overcapacity.
  • Control excessive costs - for example, over-specified supplies or excessive spend on taxis and business lunches.
  • Identify opportunities to improve efficiency; use time-saving tech, streamline processes and consider outsourcing non-core activities.
  • Design products and production to use standard components and efficient processes; improve quality control to minimise waste.
  • Improve financial control; refinance expensive overdrafts with loans and minimise working capital.
  • Before making any changes, assess the potential downside, such as damaging morale, reducing quality or creating long-term vulnerability.

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