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More ways to reduce your business costs

No matter what kind of business you run, there is always a way to increase profits.

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When looking at a business’s finances, executives or SME owners often look at how to either increase sales or cut costs. The market can look to have been maximised or costs cut to the bone, but there is often more wastage in the supply chain than you might imagine.

By taking a close look at supply costs, you will discover how they are impacting your profits. Shipping, storage and retrieval are key elements, and each phase of the process needs to be managed closely.

Supplier Management Software such as that provided by companies like Supplier Management Software company Contractswise can help to do this.

Renewal

Companies can spend up to two thirds of their revenue on procurement, so even small percentage reductions in costs can have a huge impact.

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Beginning with your suppliers, look at costs when contracts come up for renewal. If you are a regular customer. you may have become one of the clients your supplier thinks he no longer has to negotiate with, and you may have settled into a comfortable relationship based on reliability.

Deals can always be made, and no supplier wants to lose a good customer. Consider multiple suppliers for the same product or service to get the best price and help to continually drive that cost down.

Interest

Looking at your payment process within the supply chain will also help to boost profits. There may be discounts on offer for early payment or a long period of grace before payment is due. You should be managing your supply chain closely enough to know which is more beneficial for your company.

Many small companies make payments by company credit card. When looking at your payment schedules, make sure you have the best possible deal on interest payments on your credit card. Move the balance to a different provider if a better deal can be found.

Once inventory is on your premises, ensure that your warehousing space is being used efficiently. A strategic analysis of storage can help reduce costs in terms of space and time spent searching for items. This will also have the benefit of fulfilling orders quickly, creating a positive impact on the supply chain.

 

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