Cutting costs?

Cost cutting exercises are normally conducted during economic downturns.

Focus is turned towards non-core business activities and non-essential expenses.

However, this, more often than not, cannot be avoided if the business is to survive.

Employee layoffs

One area that businesses look at is retrenching employees.

Letting go of staff is never easy.

It’s hard on both sides, more so for the employee who will be out of work and having to start all over again, if that is even a possibility for them.

In terms of staffing, cut backs lead to remaining employees having to double down on work and impacts efficiency.

Expenses

Expenses may be easier to cut back on.

Doing away with unnecessary expenses like entertainment, company trips, etc will help with cash flow.

Moving offices to cheaper rental premises has a degree of difficulty and involves costs.

There is also the question of whether expenses are proportionate to the revenue generated. 

In economically viable times, these may go unnoticed.

Is this avoidable?

Yes, to a certain degree.

Most of the cutbacks can be avoided.

Often, cutbacks are necessary because as businesses grow more employees are hired, processes became less efficient, controls over expenses became lax.

Employees that are hired are either round pegs in square holes or add disproportionately to the employment overheads.

In similar fashion, expenses can escalate disproportionately to revenue generated if there are insufficient checks and balances in place.

Lean and mean

Non-core business functions are a cost to business and do not contribute to revenue.

They play a supportive role.

In terms of expenses, timely review of financial reports ensures they are kept within control.

This is where Adventus can help you nurture your business through good times and bad.

When you outsource your non-core business activities like Accounting and Payroll to us, the cost to you is less than a third of hiring a full time employee.  

For Accounting, this is especially advantageous to your business because we work with you in real time avoiding duplication of processes and ensuring you have timely information available to make decisions and control expenses