Cost-saving will be key for many businesses struggling to get back up to speed after the pandemic.
Many small and medium-sized enterprises (SMEs) are being battered by inflation approaching 10 per cent, staff shortages, rising fuel prices and costs like a rise in National Insurance and funding a rise in the living wage.
So, cutting costs is a bit of a no-brainer, but how can it be achieved?
There are obvious methods like reviewing personnel, cutting energy costs, or reviewing suppliers.
But as you are already paying for cloud accounting software to remain compliant, it is worth considering how to get the best value for your money, by harnessing the full power of the software.
All VAT-registered businesses should be using one form of cloud accounting to comply with HM Revenue & Customs (HMRC) Making Tax Digital regulations.
However, the software is capable of:
In fact, by using cloud accounting to automate more processes, productivity can be dramatically boosted, thereby increasing employee output.
The software allows repetitive manual data entry tasks to be eliminated by automatically updating data.
Not only does this give your employees more time to dedicate to other tasks, but this also reduces the number of human errors – which, again, saves valuable time and energy.
With cloud accounting allowing for accounts to be accessed from anywhere, this provides an opportunity to evaluate the company’s fixed costs.
The need for large office spaces could be redundant if more employees are opting for a hybrid working approach, or solely working from home.
Whilst this is not a possibility for every business, should the option to downsize be available, this can make a substantial difference to the business’s costs, with both rent and bills being reduced.
Monitoring cash flow
The software is also a handy tool for nurturing a healthy cash flow.
As accounts are constantly updated, it is much easier to spot growth opportunities as well as potential issues as soon as they arise.
For instance, if one of your products or services has experienced a sudden increase in demand, this can direct action to increase production and sustain sales, which in turn facilitates growth.
On the other hand, the insight from data can also highlight issues. If the cost of a raw material you use increases, the data can inform how this would impact your profits, along with whether alternative materials may be needed.
Need help with cutting business costs? Contact our expert team today.