Business

When going gets tough, it’s time to adapt your budget

LAST week we spoke about organisational structure reviews and how important this is when business is tightening or the economy is slowing.

Being adaptable will put you ahead of the game and competitors. Most well-run businesses are setting up their 2014 budgets.

This is an ideal time to address a key cost centre of your business - the overheads!

While speaking to a client about how difficult things had become in their industry, their business manager chimed in to say the budgets were complete.

When asked about the overheads and how they were arrived at, she said she adds 5% to them all in order to finalise the budget.

That's 5% on last year's figures. I asked why? Did she think this year is going to be 5% better?

This is obviously the best way to cut the corner and miss out on a serious overhead efficiency dividend for the business.

Sometimes it's even worthwhile having incentives in place for business or administration managers to identify savings from the review and questioning of each and every overhead.

So many things get taken for granted. In one case recently we commissioned a report from Telstra for a business that had nine incoming lines and seven outgoing.

The report found only once in 12 months had they had all nine incoming lines in use and they had never used seven outgoings at once!

Once things were streamlined the saving turned out to be more than $1000. You only need a few of these and the Christmas party pays for itself. Just joking!

However the point is that expenses such as these can and often do provide improvements to the bottom line of the business.

Even asking the bank to review their services and ask how these can be streamlined to obtain a better value outcome is possible.

We recently identified overhead costs savings of $150,000 for a client. Savings in overheads fall straight to the bottom line.

All businesses should review this area on an annual basis. There are many areas within overheads that can save a business money.

Topics:  accounting, budget, business




Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

'All I heard when my baby cried was ‘you’re a terrible mum'

APN Hey Mummy Feature for online - stock images of Katie Dykes. Photo Marc Stapelberg / The Northern Star

KATIE'S battle with PND is not unlike many mothers.

'I just thought all mums got no sleep'

MELTOPIA battled PND with all four of her children.

4 survival tips for mummas heading back to work

The few reminders every working mum needs to read.

Health and nutrition with kids - how do you balance it?

HOW important is health and nutrition in your household?

Smack or no smack - where do you stand?

THE debate is reignited - is smacking acceptable?

Technology and kids: Do you ever cut their wi-fi?

Check out our new video series featuring mums having a chat

'Cruel': Family of 9 in Gladstone housing commission home

CROWDED HOUSE: Pa, Ma, Kelly, Lou, Chris, Lea-Ann, Patty, Nelson, Joey and Brendan squeeze together for a family picture.

“I’ve been in my house for 19 years and I know my rights”

Coalition 'shooting from the hip' with CQUni funds

Incumbent LNP member for Flynn Ken O'Dowd with CQUni's vice chancellor professor Scott Bowman and associate professor Owen Niven.

Funding secure with only two days left until the election

Gladstone home to coffee company's third best barista in Australia

Sara Senius came third in a national competition.  Photo Mike Richards / The Observer

SHE IS as keen as a coffee bean when it comes to competing.

Latest deals and offers

60th wedding anniversary

Leila and Pertti 'Peter' Kouivunen celebrated their 60th wedding anniversary this month.

Leila Koivunen has just celebrated her 60th wedding anniversary with husband...

Zac Beers on MEdicare

Labor held a rally on Dawson Hwy about more cuts to Medicare.

Clive Palmer to re-open refinery

Clive Palmer on ABC radio.

Clive Palmer talks about his achievements, election chances and re-opening the...

Burnett Heads housing development approved

COUNCIL APPROVED: A Burnett Heads housing development has been approved by Bundaberg Regional Council. Photo Contributed

Councillors approved the development seven votes to four

Three bedroom, 1100sqm block: Is this Qld's cheapest home?

BARGAIN BUY: Is this North Bundaberg property the cheapest home in Queensland?

Becoming a real estate mogul is all about risk and reward