Back to basics: Simple ways to cut soaring business costs

It’s no secret that the cost of living is sky high. Both personally and in business, every penny counts and with inflation currently hovering at 10% and rising, time is of the essence.

Cutting your costs and waste and expanding your income stream is the name of the game. Day to day it’s easy to forget the basics, so here we’ve put together our quick tips to help weather the financial storm.

1. Manage your costs

Keeping your costs down can boost profitability. The important thing here though is not to cut costs so much you end up cheapening your product or reducing quality in the eyes of your customers.

Check your key cost areas, including:

Suppliers: Could you negotiate a better price with suppliers or change supplier altogether? What contracts are coming up for renewal? Could you purchase on a 'just in time' basis to more effectively utilise your working capital?

Premises: Is your office space too large for your current needs? With many staff working remotely or on a hybrid basis, could you negotiate on rent or move to a cheaper premises? If not, could you sublet out an area of space?

Finance: Does your company have loans or other lines of credit? If so, are you on the best deals in terms of interest? Are the rates competitive?

Production costs: Are any areas of production costing more than they should? What are your costs of materials and staff costs looking like for example? Are there any production processes that need adapting?

2. Check your prices

Review your pricing structure regularly. Changes in the marketplace could allow you to increase your prices without risking sales. However, make sure you do your homework and test any price rises before making them permanent.

3. Get the best deal from your suppliers

Shop around for the best deals from your suppliers and haggle prices where you can. Some may offer discounts for early payment for example.

Where you’ve been with a supplier for a long time, see if they’ll reduce the price for a longer term contract or minimum annual spend. And of course, don’t be afraid to switch suppliers for one that does the same job for a better price.

If you have more than one business, it’s often also worth trying for a discounted rate by using the same supplier for all of them. Just be careful about keeping all your business with one or two suppliers, as it could be a huge headache if something goes wrong.

4. Reduce business waste

Waste can be incredibly expensive, so again review it regularly. For instance:

Are you getting the best deals on your utilities, e.g gas, water, internet and electricity?

Could you reduce your power costs, for example by turning equipment and switches off when not in use?

Is there anything you’re paying for but not using? Photocopiers or additional phone lines for instance?

Could you let out any space, during evenings or weekends to generate additional income?

If you rent your premises, could you negotiate a longer contract in exchange for a lower rental?

5. Streamline your processes

Are there more efficient ways to manage your processes? For example, are there any processes that could be automated? Do you have too many staff on one particular job? Are any of your processes especially long-winded and costing you money?

Carry out an evaluation and see where efficiencies can be made to save your company time and money without impacting your service levels.

6. Invest in R&D

Only by developing brand new products, services and processes (or drastically improving new ones) can a company truly grow and thrive. The good news is the UK government has long encouraged companies to innovate by offering tax incentives such as R&D Tax Credits.

Available to any company of any size and in any sector, R&D Tax Credits allow companies to claim up to 33% of their eligible R&D costs back. This is offered either as a reduction in Corporation Tax or as a cash payment. It doesn’t even matter where whether the company is profitable or not.

Despite the fact that the scheme has existed for over 20 years, too many companies are still missing out. Many are daunted by what can be a complex claims process, which is where Tax Cloud comes in.

Why use the Tax Cloud portal?

Tax Cloud is an online claims portal that means you can quickly and easily create a watertight R&D Tax Credits claim. It was developed back in 2017 by the R&D tax experts at Myriad Associates as an alternative to the full consultancy service. It’s simply a case of following the steps to input your figures and create your R&D technical report ready for submission.

Yes, you could have a go at a ‘DIY’ claim and hope for the best. But the problem is that over-claiming is all too easy, and the last thing you want is to end up with an HMRC enquiry. You also don’t want to risk leaving money on the table that’s rightfully yours.

The Tax Cloud portal is also cloud-based, making it accessible 24/7 from any internet-connected device. There’s nothing to download or maintain, and of course our R&D tax experts are on hand every step of the way. In fact, the next stage of your application won’t open up until the last one has been checked by our specialists and feedback given.

Then of course there’s the fees, which are much lower than the full Myriad service. This is simply because you do the inputting of your own figures and report yourself, but it’s a great way to save cash when claiming. Plus there’s nothing to pay up front - with Tax Cloud, your fee is only paid on success so you’ve really got nothing to lose. It’s even free to sign up.

Make a low-cost R&D Tax Credits claim today

Why not book a free demo and find out how the Tax Cloud portal can work for you. You’re also welcome to get in touch using our contact form, or by calling 020 7360 4437.

Author Barrie Dowsett, ACMA, GCMA CEO, Tax Cloud