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How Important is Cost Management?

Although cost management is crucial to any company's growth, it is still neglected especially when your are not fully aware of it's benefits.

The knowledge and monitoring of the financial resources spent in business activity are essential not only to control cash flow, but also to identify unnecessary expenses.

  • When was the last time you reviewed the Terms of Trade for your clients?  Also, do you know what your Terms of Trade are with your Suppliers and have you re-negotiated these lately?  These can have a big impact on your cash flow.

  • Do you know what your cost of goods are?  And are your prices reflecting these? and when was the last time you reviewed these?

  • Subscriptions are a huge cost to any business.  When was the last time you looked at everything you subscribe to and assessed if it's necessary and helping your business grow.  What do you get out of it?

  • Are you passing on relevant costs?  Do you know what your should be passing on?  We had a client recently where we found approximately $65k in overheads that should have been passed on as costs of the job to clients.  That would make a huge difference to Cash flow.

  • Are you aware of the penalties and interest you can incur by not paying something?  For instance Inland Revenue Department love to add these to unpaid GST or PAYE. 

For cost management to be efficient, you need to identify all company expenses, determine a budget, control the costs, monitor all variable and fixed expenses and frequently analyze the information.

We can help with a Business Plan and Cashflow Forecast to help you get to grips with these expenses and improve your cashflow. 

Contact the Team to make an action plan. Let's work together and make one of your goals for 2023 to reduce unnecessary debt.