A Manager's Guide to Controlling Costs and Boosting Profits
Written by Al Kraus
A manager has to tackle more jobs than people often realize. He or she can get stuck between dealing with customers and suppliers, handling lower level employees and pleasing upper management, so keeping day to day operations rolling can seem like more than a full time job. The best company managers know that their job isn’t just about managing various departments—they prove that they can also increase profits.
It’s no secret that the simplest way to increase profits is to reduce costs. By cutting costs you increase your profit margin. In addition, when you cut costs you can pass some of those savings on to your customers, resulting in more customers and (obviously) more profits.
Here are 12 profit-boosting, cost-controlling tips:
1. Negotiate with your suppliers for better prices. A good supplier will negotiate if you offer to buy in bigger bulk or for longer periods of time. Find a supplier who will get to know you.
2. It is always cheaper to advertise online than in traditional media. Rethink your advertising to take advantage of social media sites. This will not only cut your advertising costs it will also increase your revenue.
3. Renegotiate your lease. Landlords understand that a renegotiated lease is better than an empty space. If you own your space look at refinancing your mortgage.
4. If possible, consider switching to an office suite that shares copiers, meeting rooms, a receptionist and support staff.
5. Consider taking on a virtual assistant, letting employees work from home and using contract workers. In some cases you’ll save on benefits. You can also potentially downsize your space, allowing you to also save on utilities, give employees more flexibility and help save the planet by reducing your carbon footprint (and road rage).
6. Ask the professionals you utilize—especially your insurance agent—how to reduce business-related expenses. Often the best way to do this is to change insurance agents. Find someone who can bundle packages.
7. Switch to a cheaper Internet service and telephone provider. Often you can find these services bundled at a substantial savings. Make sure the quality is worth the savings. Your staff needs to be able to have great Internet and phone service to do their jobs.
8. Look into free business banking.
9. See if switching utility providers can save your company a significant amount of money. While utilities might not fall directly under your department, showing any overall savings for the company will look good for you.
10. Simply conserving energy translates into big savings. Install energy saving light bulbs and turn off copiers when not in use. These small actions may seem too insignificant to bother with but the savings add up.
11. Consider using computer equipment and software a little longer. It is no longer as essential to make costly and frequent IT updates as it was five years ago.
12. Get your employees to focus on a green/waste reduction mentality. See how much paper, ink and packaging can be reused, or switch to electronic transactions that do not need to be printed.
About the Author: Al Kraus is the Marketing Lead at Procurex Procurement Management & Solutions. Procurex plays a key role in providing manufacturing companies with overall profitability and growth through cost management consulting that can deliver sustainable operational efficiencies and secure a competitive advantage for your company.
Six issues at the top of tax and finance leaders’ agenda
New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.
According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.
And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.
Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.
Trend 1: Businesses seek more strategic counsel from tax
Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.
According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”
Trend 2: Tipping point for resourcing models
Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.
Trend 3: Digital tax administration is moving faster than expected
in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.
"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."
Trend 4: Data simplification and lower-cost resourcing are top priorities
Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.
At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”
Trend 5: Skillsets are shifting
Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.
Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact
Trend 6: 2020 brought productivity improvements
Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.