With UK inflation rates continuing to rise, considering ways to reduce expenses should be on every business’s agenda
The start of 2022 has already seen its ups and downs. Restrictions easing and life returning to normal has been a blessing for millions, but recovery from the pandemic has hit the economy hard. Inflation in the UK reached 7% in March 2022 , with the figure likely to rise further.
Businesses need to be careful during these times – cash flow is a key issue is failing companies. One way to manage cash flow effectively? Reduce expenses.
Below we look at just three ways your business can reduce expenses, manage cash flow, and continue to enable flexible growth in 2022 and beyond.
#1 – Adopt a cloud-based ERP
If you haven’t already made the move to cloud-based technology, now is your sign to do so. A key benefit of utilising cloud technology is that it can significantly reduce hardware costs.
Cloud-based ERPs such as NetSuite are online systems, with the complete infrastructure in the cloud. This means that on-premises servers are obsolete, saving money and time keeping them running. You can learn more about the difference between on-premises and cloud here.
In addition, hardware can be particularly expensive if your business is accelerating in size and continuing to grow. On-premise systems present significantly greater challenges when growing, they incur more purchasing and costs and do not provide the flexibility that true cloud-based ERPs have. With cloud ERP technology, the cost of purchasing, implementation, and maintenance is drastically lower.
NetSuite will support your growth from 50 to 5,000 employees and beyond, with no need to purchase additional hardware. This will dramatically reduce your expenses and help you to maintain a healthy cash flow.
#2 – Paperless
It is surprising to see the number of businesses who have yet to go paperless. Not only is this best practice for the environment and reducing our impact on the planet, but it also saves a considerable amount of money.
There are costs involved through every point of printing and using paper, from purchasing the paper itself, buying ink and keeping printers running and storing paper in cabinets. This is a continued expenses and will make a large dent in cash flow.
By moving to the cloud, as discussed in point 1, all files/document will be digitally stored. This removes the need for physical formats and in turn removes all the additional expenses seen above.
Furthermore, employees often waste more time during paper-intensive processes – they are long and ineffective. Poor employee utilisation is an expense that businesses need to spend more time to address, it is a large waste of money and time. Moving to a cloud-system such as NetSuite is more efficient and time effective and will have employees spending more time on the work that really matters.
#3 – Employee happiness is key
Employee turnover comes with a high cost. Whether this is due to the hiring process, training, onboarding or the negative effects on other team members workloads, it is much more expensive to hire new employees than maintain existing ones.
For these reasons it is essential to keep employees happy and fulfilled in their roles. By focusing time on building an environment and culture that makes them want to stay, businesses will, in the long-term, notable reduce expenses.
This could be done through a number of things including:
- Providing a flexible and encouraging work environment
- Preventing micro-management and giving employees the freedom to shape their own roles
- Driving communication and transparency at every level
- Recognising and rewarding
- Promoting good health, both physical and mental
- Training and investment
Happy employees = reduced expenses, increased productivity and better team efficiency