- If you’ve ever watched your electricity meter when the kettle is put on to boil you’d be alarmed! If your team make drinks at different intervals throughout the day, each boiling a full kettle of water for 1 cup of coffee it is both a waste of electricity and staff time. Think about investing in an instant hot water heater or perhaps suggesting the first person in boils a full kettle and the hot water is then kept warm in a thermos flask. Alternatively only boil the amount of water you need.
- Stationery. Paper supplies can be a really high cost for businesses and deforestation has a huge environmental impact. Simple things like changing the default settings on your photocopiers and printers to ‘double sided printing’ can make a huge difference and encouraging your staff not to print emails unless necessary.
- When refurbishing your office try moving away from fluorescent strip lighting or bulb lighting to LED (Light Emitting Diode) lighting. LED lights do have higher up-front costs but last much longer and have a much lower power usage. Disposing of LEDS is safer for the environment too. Flourescent bulbs contain mercury which is toxic.
- Heating the office. It’s important your staff have comfortable working conditions. It aids productivity and boosts morale. In winter make sure the building is heated sufficiently but don’t leave the central heating on all day or over the weekend if nobody is going to be there. The same applies to air conditioning – don’t leave it on outside of office hours and don’t have the air conditioning on and windows open at the same time. In spring time it’s lovely to open the windows for some fresh air rather than sticking the air conditioning on!
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Friday, April 22, 2016
Tuesday, April 19, 2016
…yes it might stop the bleeding but the strangulating side effect is, I would suggest, something most patients are unwilling to accept!
Why then is the Department of Health asking accountancy firms to review the way NHS Trusts report their finances? And why are NHS directors being put under pressure to be less prudent in their forecasting?
The Daily Telegraph reported that briefing documents suggest that trusts will be asked to review 19 specific areas such as reclassifying assets so they are kept off the balance sheet, or extending their asset lives so they can be valued more highly.
These suggestions, like the tourniquet around the neck, are dangerous.
It pushes problems into the next financial year rather than solving them and is definitely viewed as a ‘fiddle’.
Figures from NHS regulators show that the deficit for the first three quarters of the year is already £2.26bn – which is triple that for the whole of the previous year.
There are several key things we can learn from this example…
- Don’t bury your head in the sand or change your
reporting to make the figures fit your forecast. If you’re going to do that
what’s the point of forecasting in the first place? You’re just kidding
yourself and setting yourself up for failure ahead.
If something doesn’t add up, investigate what happened and put measures in place to correct it. However painful that may be!
- Keep control of the costs. It doesn’t matter how large the organisation is, if you instill a cost competitive culture at every level it will avoid unnecessary waste.
- It’s vital to have a robust and accurate accounting structure set up from the outset. If you don’t have the skills in-house to do this use a professional outsourced service who will account for everything correctly.
- If your organisation is leaking money put measures in place as quickly as possible to stem the flow while still allowing you to operate effectively. Leave it too long and there may be nothing left to salvage but if controls are too tight you run the risk of strangling your business. You need to find a good balance.
If you want help on any of this just drop us a line.
Friday, April 15, 2016
Apparently we all did! In 2015 British Institutions wasted a massive £194bn
A new CIMA (Chartered Institute of Management Accountants) study put cancelled projects at the top of the waste heap followed closely by over-payment for goods and services and unnecessary purchases.
The frustrating thing is it’s so simple to avoid most of that waste…
It isn’t rocket science…
it just takes a few simple controls and procedures…
and a slight culture change from everyone in your organisation.
‘Waste not, want not’ isn’t just an ‘old fashioned’ phrase my dear old Nan would say. It was a habit that was learned the hard way when most of the world was in turmoil and everything was scarce.
It was a thought process for every discarded item and every purchase made
Do I need this? Is it the best price? Is it more cost effective to repair or replace?
That thought process is just as applicable for UK business today.
The lack of a ‘cost-conscious culture’ is a real threat to UK competitiveness.
We don’t expect organisations to re-use tea bags or dig for victory but we do strongly suggest you put in place a strategy to drive cost competitiveness.
Take a sensible approach and you can’t go wrong.
Here’s a few simple suggestions to get you started…
- Stop and think before signing and spending. Your cash is committed at the time of placing an order not at the time of signing the cheque.
- Question purchase orders. As the owner of the business you can’t always approve every purchase order raised but it’s important that you do see them from time to time. Knowing they may have to justify the expenditure to you will influence your teams cost-conscious culture.
- Understand what the expenditure is for. Be certain you fully understand contract periods and cancellation policies. Utility providers are notorious for lengthy notice periods.
- Approved suppliers. Suppliers can become complacent and prices can rise if left unchecked. Ensure they are still competitive.
- New or repairable? Do you need to replace it with a new one? Can it be economically fixed or is it still under warranty?
- Discount. Have you tried asking for a discount on the price?
- Encourage everyone’s feedback. Everyone in your organisation can influence cost savings. Ask them for suggestions on better ways to do things. It might make savings in terms of time spent doing jobs.
- Review regularly. Are you sure of what all your expenditure is for? Are you still paying a Direct Debit for a magazine subscription you no longer need?
Just think what could be achieved with an extra £194bn if we all played our part!
What savings can you make and what would you rather spend that money on?