We are continuing on with CPA Australia’s tips for Small Businesses – this is the third tip in the series of five.

Tip 3 – Review your cost structures for savings

Increasing business costs was a theme in some of the markets surveyed. If a business cannot bring costs under control or pass increased costs onto customers, this reduces both cashflow and profitability and can impact the future viability of your business.

We therefore recommend you consider:

• reviewing costs under your control. Be strategic in cost-cutting as it is not uncommon for businesses to cut aggressively, only to have to reverse some of those cost-cutting measures later on
• do not be afraid to ask suppliers for discounts and/or change how and when they deliver stock to you. This can for example, reduce warehousing costs if suppliers can give you "stock on consignment" or if they supply to you on a "just in time" basis
• compare your cost structures with other businesses in your industry and with your past results to identify areas for improvement

Sound like too much hard work – or that we are speaking a foreign language? We can help you!

If you’d like further information – or would like to discuss whether this tip is relevant for your business - please do not hesitate to contact your accountant.