Cost Control

4. Easy Savings

Some costs can be reduced with little risk of an adverse impact on quality and performance.

4.1 Checking supplier invoices may reveal overcharging.

• Common examples are double billing, incorrect charges and missing discounts.

4.2 Eliminate unnecessary costs.

• Get rid of obvious overcapacity (eg unused telephone lines).
• Cut out blatant waste (eg heating premises at night, or with windows open).
• Scrap useless processes (eg paperwork that is completed, filed and forgotten).

4.3 Crack down on excessive costs.

• Use second class postage, or email or fax, unless only first class post will do.
• Find alternatives to high priced suppliers, or negotiate discounts.
• Avoid over-specifying (eg high-quality components for a low-quality product).
• Ban wasteful luxuries (eg full-fare business class flights).Cutting back on items employees see as 'benefits' or 'perks of the job' needs careful handling (see 6.1).

4.4 Root out inefficiency.

• Identify manual, paper-based systems that could be replaced by computers.
• Avoid frequent small orders. They waste time and may mean you lose discounts.
• Consider switching to single monthly invoicing to cut processing and admin costs.