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




BREAKING: Two rushed to hospital as crash shuts down busy Gladstone road

The crash on the corner of Tank St and Glenlyon St.

ACCIDENT directly outside Gladstone’s ambulance headquarters.

Gladstone girl 'spewing' after 'green gunk' in Kirkwood Woolworths juice box

Mum of two Patrice Cornell found "green gunk" in her daughter's juice box.

MUM claims daughter, 2, got food poisoning from rotten juice box.

BOM: Temperature to drop near freezing in Gladstone region tonight

This radar image depicts the temperature forecast for 7am on Thursday morning.

IT'S set to get icy in the Gladstone region tonight.

Latest deals and offers

Kerri-Anne Kennerley to Sonia Kruger: "Stay brave"

She said her television peer should "stay brave"

Swimwear designer looking for love on The Bachelor

Noni Janur on her first day of filming.

The 25-year-old is one of 22 women vying for Richie Strahan’s heart

Three reasons your mind will be blown this week

Alan Dale and Jacki Weaver in a scene from the TV series Secret City.

THREE shows on Foxtel to make your mind boggle.

Elena wins MasterChef: “I’m ecstatic and eager to celebrate"

MasterChef Australia 2016 winner Elena Duggan, from Noosa.

NOOSA chefs survive marathon grand final dish by Heston Blumenthal.

Shannen Doherty shaves hair during cancer battle

Shannen Doherty has completely shaved off her hair

You can own this Queensland town for just $1

Yelarbon

Unprecedented auction of town's business centre with no reserve

Work starts on $15M Caloundra apartment building

Turning the first sod at the Aqua View Apartments site in Kings Beach are (from left) husband-and-wife developers Alex Yuan and Stella Sun with construction company Tomkins director Mike Tomkins and Councillor Tim Dwyer.

Developers excited about addition to Kings Beach skyline

72-year-old Coast developer set to start new project

GREEN LIGHT: The Cosmopolitan has been approved for development at Cotton Tree.

Meet the Canberran set to deliver another chapter for Coast suburb

Plans revealed for 1500-lot 'master-planned community'

Precinct will be bounded by Boundary St and Shoesmith Rd

Ecco Ripley sales run sparks prime release

MOVING IN: Sekisui House has announced the release of more residential blocks at Ecco Ripley.

Sekisui House is preparing to unveil more land at Ecco Ripley

The climb is slow but property on the way up

Michael Matusik, director of Matusik Property Insights.Photo Allan Reinikka / The Morning Bulletin

The improvement would be mild when compared to past cycles