Cost Review
Cost review is one of the most important items that business people should be considering in difficult economic circumstances.
• Have you reviewed the prime cost of materials and supplies used in your business?
• Could costs be reduced by having discussions with your suppliers to see whether they’re able to reduce prices or offer additional services and incentives?
• If your present suppliers are not inclined to reduce prices, have you had some discussions with alternative suppliers?
• If you’re importing your prime materials/products, has the devaluation of the Australian dollar, against most major overseas currencies, dramatically affected the landed cost price of materials? If so, should you be looking for alternative products that might not cost as much to land in Australia?
• The individual overhead costs should also be reviewed. Could reductions be made in the expenses being incurred, particularly in items such as travel, accommodation and communication costs?
Stock Review
• Do you monitor the level of investment in stock on a regular basis?
• Do you monitor stock turns regularly?
• Is there a system to identify slow moving or obsolete stock so it can be featured in special advertising and promotions?
• If there is a slowdown in the sale of “top of the range” products, should the business be purchasing additional “middle of the road” products?
Survival in Difficult Times
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This post is part of the “Survival in Difficult Times for SMEs” series.
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Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
Christie has written 799 awesome articles for us at Alan Lewis Accountants – BLOG
Twitter: @christielewis
