Posts Tagged ‘expense reduction’

80/20 Accounting

The 80/20 rule (Pareto Principle) is one of the most useful we will ever encounter. Let’s discuss its use with 80/20 accounting. This is about focusing on the 20% of customers, products, expenses, etc. that account for most of our company’s results. Read the rest of this entry »

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The Latest is Not Always the Greatest

We live in a time of constant change. As a result of this and effective marketing, some companies get people to buy things they don’t really need. What do I mean by that? Read the rest of this entry »

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Buying Insurance Is About More Than Cost

When it comes to buying insurance it is easy to get focused on just the cost. That can be a big mistake because buying insurance is about more than cost. Read the rest of this entry »

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Don’t Let Vendors Become Complacent

If you are diligent you will likely find that you can get better deals from your vendors than you are led to believe. Read the rest of this entry »

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Shop Around to Find Quality Insurance for Less

Do you find your business’s insurance cost getting more expensive each year with no better coverage and perhaps less? Beware of complacency. Read the rest of this entry »

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Discretionary Spending

When discussing discretionary spending it may be a little more complicated that it first appears. In the posting Analyzing Expenses we discussed three categories of expenses – fixed expenses, variable expenses, and semi-variable expenses. This posting involves semi-variable expenses, but with a bit of a nuanced approach. Read the rest of this entry »

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Are All Those Expenditures Necessary?

If you own a house, unless you are unlike most people you find after a fair amount of time that clutter appears. Interestingly, when you decide to do something about it the initial reaction can be a feeling of being overwhelmed. That is why one of the recommended ways to reduce stress is to de-clutter. Likewise, clutter is something that creeps into every business at some point, especially when it comes to unnecessary expenditures.

Paper Everywhere

A typical area a business becomes cluttered is with paperwork. When it comes to records, the same thing can happen with Read the rest of this entry »

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Outsource and Save

There is a tendency for business owners to try and do it all. Often that is not the best use of resources. In a previous posting Spend Wisely – Go Part-Time I talked a little about the financial advantage of outsourcing. In particular I compared my experience as both an employee and a part-time CFO/Controller. In this article I looked mainly at two things; cost savings and best use of talent. Now let’s consider other benefits to using outside resources.

First Things First

Just to summarize, the first point previously discussed had to do with having a highly skilled employee spend most of their time on tasks that really did not require their level of expertise. In the second point an example Read the rest of this entry »

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Have a Lean Business

Have you ever tried to lose weight? If so your experience may have ranged from easy to difficult. When it comes to reducing costs a business may have a similar experience. By costs I’m referring to both product cost and expenses. Why do some businesses find it easy to reduce costs while others struggle and eventually stop trying?

Think Lean and Communicate It

Like losing weight reducing costs starts with Read the rest of this entry »

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Things Financial Analysis Can Tell You

In Financial Statements are More than Results I touched briefly on financial analysis, but here I will go into some more detail. The real value of financial statements and other financial information is in the analysis. Allow me to elaborate.

A Simple Example

In math we might see the simple algebraic equation Y = 2X where Y is defined as the dependent variable and X is the independent variable. That is, Y’s value depends on the value of X.

Financial analysis is much like this in that we are looking at what independent variables drive Read the rest of this entry »

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