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8 Cost-Saving Strategies to Beat the Heat Not Your Budget

By June 6, 2024July 10th, 2024No Comments

graphic says budget with graphs

If you’re working to manage your budget despite increasing costs, it can be challenging. That’s where strategic planning and prudent financial management come into play. Despite adversities, almost any business can flourish with sound budget management.

Jonathan Bello, Founder of One 8 Solutions, fully supports this idea. “As a seasoned business owner for over 23 years, I’ve navigated the complexities of budget management with strategies that have grown my business and my clients during good times and bad.

Based on this experience, I’d like to share eight cost-saving strategies and insights into budgeting and forecasting:

Embrace Technology for Financial Analysis and Forecasting

While the task of budgeting and forecasting may seem overwhelming, technological advancements have made it more accessible, efficient, and user-friendly than ever before. With the aid of advanced software solutions like QuickBooks Online (QBO), businesses can streamline the budgeting process, starting with the fundamental aspects of revenue and costs.

Leverage QBO for Budgeting and Forecasting

Even if math isn’t your thing, budgets and forecasts serve as the bedrock of financial planning; but they can be difficult to create. To make the budget process easier, start with revenue projections. Determine your desired gross profit margin and use it to calculate the cost of goods or services as a percentage of revenue.

As an example, say your revenue target is $1 million and your desired gross profit is $600,000, your cost of goods sold would be 40% of revenue. Once revenue projections are established, turn your attention to recurring costs like rent or lease payments, insurance/benefits, utilities, and supplies and materials. While you’re at it, make sure to factor in indirect expenses like payroll, sales, administration, marketing, commissions, and advertising.

Using QuickBooks Online features and One 8 Solutions Bootcamp training, you can input last year’s numbers as a starting point for the budgeting process. This provides a solid foundation to build your annual budget and allows you to override numbers that align with current goals and market conditions.

Want to learn more? Check out this video: How to Import Budgets in QuickBooks Online then run a budget versus actuals report to measure your performance.

payroll taxes spelled out with a man's hand and pen pointing to the phrase

Simplify Payroll Taxes with QBO

The complexities of payroll taxes can be challenging, sometimes even a headache for small businesses. With a QuickBooks Online Payroll account, this process can become more manageable. QBO’s advanced features let you calculate payroll taxes accurately, so you can follow both federal and state regulations. In the end, it means you can optimize payroll and avoid any penalties or fines that come with non-compliance.

Enhance Accuracy with Third-Party Tools

Another feature available in QBO Advanced is Spreadsheet Sync. It allows seamless integration between budget data and external spreadsheets, with real-time updates and comparisons. This article from Insightful Accountant talks about Spreadsheet Sync in more detail with helpful instructions on how it works.

While QBO provides robust budgeting capabilities, integrating third-party tools can also improve accuracy and efficiency. Solutions like LivePlan, Reach Reporting, Jirav, and Syft Analytics offer advanced options for budget management and analysis.

What’s impressive is that these tools present additional insights, customizable reporting options, and automation capabilities to streamline your financial planning process. As external software solutions, they can help elevate the accuracy and effectiveness of your budgeting efforts, and with it, create better financial outcomes.

Optimize Operational Efficiency

Streamlining operations is next. Although it’s a timely task, it’s important to identify inefficiencies, eliminate redundancies, and optimize workflows to improve productivity while trimming unnecessary costs. Have you looked at automating repetitive tasks, renegotiating supplier contracts, or restructuring internal processes? Every optimization contributes positively to the bottom line and has a compounding effect over the years.

But operational efficiency extends beyond cost reduction. You’re able to maximize output and minimize input simultaneously. Implement lean principles. Just-in-time inventory management and cross-functional collaboration can drive efficiency gains company wide, too. Continuously evaluate and refine operational processes so you can achieve sustainable cost savings and maintain high performance standards.

Implement Strategic Cost Reduction Measures

Cost reduction isn’t just about slashing expenses indiscriminately – it’s about identifying areas ripe for optimization. When was the last time you scheduled a comprehensive audit of your expenses and categorized them based on necessity and impact? That allows you to prioritize cost-saving initiatives based on facts. You might need to renegotiate vendor agreements, consolidate services, or adopt sustainable accounting practices. Strategic cost reduction paves the way for long-term financial resilience.

As you’re evaluating cost reduction opportunities, consider both short-term gains and long-term implications. While certain cuts may yield immediate savings, even if they’re carefully implemented, will they compromise quality or inhibit future growth?  Collaborate with key stakeholders (not alone in a silo) and conduct a thorough cost-benefit analysis to help identify the most effective cost reduction strategies for your business.

man and woman speaking to each other

Encourage Financial Responsibility Across Your Team

To achieve cost-savings across the board, get everyone involved. Empower employees at all levels to be more financially aware. Educate teams on the importance of cost-conscious decision-making and incentivize innovative ideas for cost savings. When you promote fiscal responsibility and accountability, it creates a collective mindset aimed at efficiency and waste reduction.

Drive Continuous Growth and Adaptation

One of the many advantages of being a small business is the ability to adapt. Continuously monitor financial performance, reassess budgetary allocations, and be quick to respond to changing market conditions. Encourage a mindset of continuous improvement, where every change – even a small one, makes a difference.

Next Steps to Ace Your Company’s Budget Strategy 

There’s no one answer to managing a budget. It requires strategic foresight and a proactive approach in your decision-making. Start by implementing cost saving strategies in small ways, then scale; upgrade your technology, optimize operations, outline cost reduction measures, encourage financial responsibility, and look for continuous improvement at every level of your company.

Ultimately, I’m a fan of both cost-cutting and growth strategies for every small business. Together, they exceed your predictions and help you achieve the financial success you’ve always dreamed of.

Want to learn more about cost-savings measures and customized accounting services? We know that understanding financial data is fundamental to success – and particularly, your success.  See how our partnership approach can help you grow your business. Schedule a complimentary Zoom meeting today.