Every successful business has to continually come up with ways on how to increase profits and how to reduce the operational costs. However, for the SMEs in particular, the latter is quite important. This is because they often have a tight budget and a fluctuating cash flow.
Fortunately, there are various ways to reduce the business expenses. The most effective ones are as follows:
The gig economy is doing wonders for the small businesses for two main reasons-
1) It is apt for a business that has unpredictable work requirements
2) It’s highly affordable.
More and more people are applying for remote jobs. In fact, many are quitting their full-time jobs to take a freelance approach to their career. So, instead of setting up a large in-house team, you can limit your staff to only a few core members, and outsource the remaining work to freelancers. This way you would only need to pay the exact amount of work you need.
SaaS (Software as a Service)
It’s no secret that quality software can greatly improve the productivity of your employees and reduce costs. However, the best way to go about it is to opt for SaaS i.e. Software as a Service.
In SaaS, you don’t purchase the software itself, but a license to use it as a service. For a small monthly/yearly fee, you can use all the features of the software. There are many advantages of this-
- Access to enterprise-level software that are generally used by large corporations.
- Affordable costs
- Reduces business expenses (as a large number of business-related tasks can be done by the in-house employees only, which eliminates the need to hire more workers)
- Access to better analytics
Examples of SaaS software include office suite (programs for spreadsheets, word documents, etc.), expense management, invoice management, etc.
GST and Other Taxes
One of the strongest features of the Goods and Services Tax regime is Input Tax Credits (ITC). This is the tax refund you will get on the goods and/or services sold to customers or other businesses. However, it can be difficult to record all your transactions with accuracy and in an organized format. It means that there is a possibility of you losing money on the unaccounted sales.
With a GST-ready software, you can keep an accurate record of all your business transactions along with the appropriate invoices. This will help you get the full ITC amount that you deserve. Additionally, this will help you save on the income tax with the provisions given under the Section 80C, etc.
We live in a digital era now. However, most of the businesses haven’t gone 100% paperless yet, even though that’s the way to go if you want to reduce business expenses.
In a paperless office, you don’t merely save money on the paper and the printing itself, but in terms of business productivity as well.
For instance, instead of using paper invoices you can send digital invoices to your clients which saves both time and energy. Similarly, using accounting and expense management software you can improve the productivity of your bookkeeper. Another example is collaboration tools (software that allow the employees to work together without even leaving their cubicles), etc. The options are endless.
Apart from these, you can also consider switching to a payment gateway that offers lower fees and faster payments, imposing penalties for late payments made by your clients, finding vendors that are offering better rates, etc.