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Kara Sharp, CPA, CFF, CFE, CVA, is a Forensic, Advisory and Valuation Services Practice Leader at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S.
Looking at expenses? Cut fat, not bone
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When will the recession be over? Eleven different experts gave their best guesses in The New York Times on March 1st, but if you’re running a business you can’t afford to wait to see who’s right.
It’s time to look at historic spending, and budget for future expenditures and capital improvements. Align your spending with your firm’s short and long-term initiatives, and you’ll be surprised at how much more cost efficient you’ll be.
Consider the following:
- Compensation and Benefits: It can be tempting to cut employees, make across the board salary reductions, or freeze hiring, but this can be very damaging in the long term. Offering early retirement or buyouts can be even worse, because your most talented people will most likely take your offer – they can find positions elsewhere.
- Office leases If you have satellite operations with just a few employees, consider work-at-home options. If you have leases coming up for renewal, consider dropping from Class A to Class B space. Negotiate! Commercial real estate has been hit hard – landlords want to do deals.
- Storage costs: Onsite and offsite, storing paper files this can be a big expense and space waster. Consider going paperless. It will pay off quickly.
- Vendor contracts: If you have several locations, chances are each has their own vendors for equipment, office supplies, even coffee. Pool these contracts and put them out for bid. Buying in bulk can generate instant savings. Vendors will appreciate your business, particularly in this economy.
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Kara Sharp, CPA, CFF, CFE, CVA, is a Forensic, Advisory and Valuation Services Practice Leader at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S.
