How to Manage Money Properly

How to Manage Money Properly, without losing to much of your fun times. Americans are spending money left and right and not understanding as to why it always gone. The american people do not protect what essentially could be their financial status, and well being. One thing I wish people would stop complaining they have no money, as well as quit asking to borrow it.

How much are you really spending on your luxury or useless items each month, this does include eating out. One of my best friends just told me the other day he probably just wastes $6,000 a month on stuff he does not need. Just for example he wastes money on: snake. Okay lets take a look on how to save your money, and make money with it.

How to Manage Money Properly:

1. Open a bank account, preferably one at a credit union.

2. Every paycheck you get, take no less than 10%, but try to do put the recommended 25% into your account.

3. Get a bank account that transfers your change leftover from your purchases into your savings account.

4. Spend less on luxury items, I know this seems harsh, but it is necessary.

5. Eat out less, you will save an average of $3800 a year if you just ate at home and imagine having this in your account every year! This is like having an extra tax return each year. When you feel the urge to go and eat, go to the bank, estimate what you would have spent and put it into your savings.

6. Grocery shop wisely, and spend the little extra to get healthier foods.

7. Change your own oil, it usually costs around $20.

8. Spend the extra.20 cents a gallon for the premium to get better efficiency on hp and/or gas mileage.

Realistically this list can go on for years, but there are so many ways to save money, these are some of the most common issues that people are talking about where they lose money on. How to Manage Money Properly, well really just stop spending so much and it would be there.

Financial Planning Advice

The aim of financial planning is to analyse your current financial status and make suggestions and recommendations that will help you secure your long-term financial future. Many leading financial advisors recognise that in order to be successful they need to comprehensively understand a client aims and objectives. Once they’ve established a clear idea of what the client wishes to achieve they can then begin to identify the best financial solution for their client.

In a typical assessment the following aspects will be taken into consideration, naturally this will vary on a client to client basis: budget, asset allocation, savings and investment, risk management, insurance, cash-flow, taxation, life cover, retirement plans and estate management.

To achieve a secure financial future that will benefit both you and your family it is essential that you discover the best possible solutions for your own individual circumstances and objectives. By enlisting the support of a personal financial advisor they can help you develop a strong financial strategy that is designed to fit in with your current lifestyle and long-term plans.

Expert advisors will assess your position on an ongoing basis and make the required changes in order to deliver the best results. As with most things in life, change happens and it is necessary to adjust your planning in the event of unexpected situations. Many leading advisors will understand that you’ve worked incredibly hard for your money and they’ll do their best to ensure that it works as hard for you as you have for it.

Financial advisors can provide information on the following aspects of wealth management:

Savings Plans. Regardless of the purpose and whether you are looking to save a large or a small amount, financial advisors will factor in different elements to find the right outcome for your own individual needs. A savings plan is the ideal way for you to save the funds you need to purchase a new house, plan a wedding or take time out to travel the world.

Lump Sum & Offshore Investment. These are often a popular alternative to keeping your saving in a bank or building society and offshore investments can sometimes provide the opportunity to take advantage of significant tax breaks.

Life Assurance. There is no value that can be placed on life but in order to find the best options that are available to you a financial advisor will be able to talk you through a range of policies and offer additional health protection cover that can be added.

Financial Planning Can Be As Easy As Counting

The concept of financial planning can be overwhelming for someone fresh out of school who never did quite well with math. The truth is, financial planning is not restricted to the number-loving elite. As long as you stick to the basics, it can be as easy as 1, 2, 3.

First rule would be to establish realistic goals. Your targets may be short-term, medium-term, or long-term. The ones you would like to attain in less than five years are short-term. They could be furniture for your household, a brand new car, or your romantic honeymoon. Spending money on your child’s tuition fees is medium-term, while retirement-related objectives like traveling are considered long-term.

Next rule is on handling expenses. Simply put, this is about budgeting. Budgeting is not synonymous to self-deprivation. It’s simply exercising discipline in not spending more than what you earn. More savings will help make your goals closer to your hands. Steering clear of debts is also an element of budgeting. Credit cards are probably the deadliest temptations. Their harmless plastic forms that fit our wallets nicely makes us forget that its still money that we are dealing with and losing with every swipe. Making use of credit cards and not being able to pay them on time causes us to end up paying more than the original fees. Utilising cash makes us more mindful of spending.

The third rule is about saving. Putting away at least ten percent of your regular monthly salary is an excellent start. Saving success are results of budgeting efforts too. You can save much more if you budget well. There are also cost savings programs at your place of work where money is automatically reduced from your payroll check so as you would no longer be tempted to spend it. Personal savings are important for emergency expenses, and they become the source of capital for your goals.

The final rule is investing. You could make your money grow! Making an investment comes in different forms. You can invest by setting up a business enterprise, depositing money in the bank and allowing it to grow over time, studying about stocks and bonds, or looking at real estate.

Financial planning is effortless if we look at it this way. You don’t need an accounting degree to write down goals, budget, save, and invest. If things get challenging along the way, you can always seek advice from financial advisers to make details easier for you.

11 Cost Saving Ideas For Your Business

Many businesses are being asked to cut cost and save money within their current operations. And in today’s world market it is even more important than ever to find way to improve the company’s bottom line, many are being asked to reduce costs or better yet, increase productivity and efficiency and lower cost at the same time. Here are 11 cost saving ideas to consider.


One of the top customer inquiries and complaints is “Where is my backorder?” The backorder not only costs customer service the time to answer the inquiry, it also costs to ship the product once it arrives in the distribution center. With the cost of a backorder ranging from $7 to $12 per backordered unit of merchandise, it doesn’t take long for them to add up and those costs come right off the bottom line. Analyze backorders and improve the accuracy of inventory forecasting. The ROI occurs for a more advanced forecasting system in 12 to 18 months based on reduction in backorders and improved turnover. Customer order fill rate should be reviewed and improved without being out of stock or overstocked. Example of backorder costs: A typical catalog with a 20% backorder rate averaging two items per order processed 200,000 orders for a total of 400,000 units of merchandise. Calculated at 20%, 40,000 customer orders had backorders. Estimating backorder cost on the low end at $7.37 per order, the catalog will have to absorb $294,800 to make up for backorders.


Product training and Company Policy
Product training is becoming a complex undertaking as merchants are constantly searching for new product. With multi-title, multi-channel and a large breadth of SKU’s available, keeping agents informed of the latest product information is a challenge. Contact centers that provide regular product training through an established formal training program benefit when the customer places an order. Agents who are not well trained on the product will have to ask for assistance which can lengthen the call time. Large centers have a full time trainer. Public information shows that Cabela’s, the world’s largest outfitter, has 235,000 SKU’s online. Along with product training and product information, communicating important messages to agents is a must. Providing pop-up windows to agents at login time provides an effective communication tool to relay information on problem products and important company meetings. Using online features for customer company policies provides easy and fast access for agents.

Agent Scheduling
Scheduling agents in the customer contact center can be a very complex task. Contact centers do a good job setting a schedule based on projected call volumes and filling the schedule with available agents, but what happens afterwards? This is where a gap occurs between the schedule and what actually happened. Take time to review the original schedule against the actual volume of calls and agents that worked. This simple task will provide insight into effectiveness of the schedule. The ROI on scheduling software shows that those that have it see their costs lowered.

Call Monitoring
Monitoring agents and providing feedback on a regular basis is essential to maintaining optimum performance in the contact center. It also provides an opportunity for supervisors to hear what the customer is saying and how the agent interacts with the customer. The use of monitoring is helpful in determining agents strengths, weaknesses and overall efficiency. Monitoring feedback by the supervisor can be used for performance review to increase productivity. Monthly call monitoring by management and merchants is a great way to stay in tune with the customer.

Universal Agents
Universal agents, those that can answer order calls, respond to emails and handle customer service functions are an asset to your organization. These agents are capable of switching tasks as the workload requires maximizing their productivity. Utilizing universal agents, particularly at off-peak times, reduces the need for dedicated agents. A mix of universal and dedicated agents within the contact center provides a balanced workforce that reduces costs and increases efficiency. The use of universal agents makes it tough to track actual work performed and costs associated with each task for benchmarking purposes.


An ongoing program of determining the correct picking slot locations is a must. Consideration should be given to product velocity (sales) and size (cube) in placing it in the pick line. Having as a goal the storage of at least one weeks average unit movement in the pick slot along with providing a variety of slot sizes should be a key focus.

There are many picking methodologies to choose from, batch picking, zone picking, pick and pass, pick to cart and pick to box just to name a few. By analyzing the type of product and the type of orders (single vs multi), the most efficient pick path processing can be created reducing travel time. Separating fast movers from slow movers and establishing a “Hot Pick” area for extremely fast movers should be considered. Picking rates range 115 to as high as 180 units per hour.

If you are not doing pick to box does your system have the capability to determine the box size for the packer? Is the pack station clean, neat and ergonomically setup? Is the appropriate dunnage inserted into each box? Where is the pack verify performed? These are just a few of the questions to look at when analyzing the pack area. Remember, presentation to the customer is as important as getting the shipment out of the door quickly. Packing rates average 35 to 40 per hour.

Inbound Freight
Inbound freight is one of the most overlooked areas for significant cost reduction in many companies. Multichannel companies often spend from 2% to 4% of gross sales on inbound freight. Most successful companies who have paid attention to inbound freight view inbound freight management as controlling inventory in transit. Since inventory is, in many cases, your largest asset, the management of this asset is critical to your business success. There is a growing trend to use freight collect rather than prepaid freight. Inbound freight should be bid out competitively often. Tracking inbound freight receipts and scheduling frees up the dockyard and provides the opportunity to schedule receiving personnel when needed.

Outbound Freight
One of the largest expense items that is always a primary target for cost reduction is outbound freight. With shipping carrier increases in the range of 3% to 5% annually, this is the first area to get questioned, “What can we do to reduce our shipping charges?” In a typical catalogue company, outbound freight ranges 8% to 12% of net sales. Competitively bid out outbound freight often to ensure the best pricing. Combining inbound and outbound freight with one carrier may produce savings. Many multi-channel companies use shipping and handling charges to offset the cost of outbound freight and package handling. Some have grown dangerously close to 20% of net sales.

Benchmarking – KPI’s
Benchmark, benchmark, benchmark. The best indication of how your operations is performing is through benchmarking. By developing a set of consistent and measurable Key Performance Indicators (KPI’s), you can measure your costs, productivity and efficiency. Once you’ve completed and analyzed your existing operation, you will want to compare yourself to accepted industry benchmarks. You want to avoid using general industry averages as those won’t be specific to your business in product type, size and customers. Many companies are utilizing management reporting online for critical KPI’s for contact center and fulfillment. You can’t improve activities which have not been measured.

Looking for Independent Financial Advice? You Must Read This

With so much advice out there, how do you know what advice is the best and what is right for you. The truth is no advice can be ranked best. Advice regarding your finance should be based on personal circumstances. After all, we are all unique as are our personal finances. The best advice you can get is to talk to or meet with independent financial advisers. They are best placed to offer whole of market advice across a range of financial matters. Whether its mortgages, equity release, retirements and pension planning or for savings and investments.

Independent financial advisors can range from large national firms to smaller partnerships and sole traders. It is down to your own personal preference, but it’s always advisable to seek a reputable firm through recommendation or referral.

Independent financial advisors are often referred to as IFA’s. IFA’s will often get to know you as a person as well as your finances to gain a better understanding of your wants and needs. This also allows for the opportunity for your chosen IFA to assess your attitude and approach to risk. This can help determine a suitable plan, fund or policy to support your financial objectives.

With the financial markets fluctuating by the day / hour, new products and new services are launched daily. Reputable IFA’s will be closely tuned into the markets and will be best placed to offer the latest advice and guidance in relation to these changes.

When choosing an independent financial adviser, it is advisable to find one that is based within your locale. This can make meetings and document signing a much easier and straight forward process. It’s always nice to put a face to name as well and speak direct to those who are working on your behalf. After all, you are trusting them with some of the most important decisions in your life, so why wouldn’t you want to meet face to face.

It’s important that when information gathering about suitable independent finance specialists to manage your money for you, that you fully understand the charging model in place. Some will opt for low fees or no direct fees on the basis that introducer fees exists on a number of financial products that are payable on a successful client introduction. Other independent financial advisers will opt for a management fee approach i.e. to charge based on advice given and a charge against the sum invested / managed. There are many different charging modes in place across independent financial advisers, but you should ensure you are clear on what this is.

If you are sourcing an IFA then it’s essential you check that the chosen firm are governed by the FSA – Financial Services Authority. The firm’s website or marketing literature should clearly show the FSA number for this to be validated.

In summary, with so many financial options and potential pitfalls out there, source information from a local independent local firm that can tailor your advice to suit you and your requirements.

Understanding Financial Planning

Financial planning is defined as a process whereby an individual or a couple settles objectives, assesses all resources and assets, estimates any future financial needs, and makes necessary plans to achieve any monetary goals they may have. It includes a variety of factors, such as cash flow management on a daily basis, selection and management of investments, as well as insurance needs. There are numerous elements that are involved with financial planning. This includes items such as risk management, allocation of assets, investing, estate planning, retirement planning, and tax planning. The strategy that is created offers a tailored approach that satisfies any present financial concerns as well as offer financial security for the future.

When a person wants the most out of the money they earn, this tool can play a starring role in achieving that outcome. Through careful financial planning individuals or married couples are able to set certain priorities and work toward achieving any long term goals they have set forward. It also provides a bit of a safeguard when it comes to the unexpected, such as income loss, unexpected illness, or work-related injuries.

No two people will look at financial planning the same, because everyone has different ideas regarding what their it will encompass. For some individuals, financial planning means finding investments that will offer security once a person or a couple retires. For other people, it is making investments and saving to have money ready for when children go off to get a university education.

When going about financial planning, it is best to obtain the services of a professional financial planner. Financial planners offer guidance and advice when it comes to any issues regarding financial planning. With life being complicated and sometimes hectic, it can be difficult to find the necessary time to manage future financial affairs. Not only that, but financial planning is often a multi-disciplinary task that “Average Joe’s” are just not capable of understanding. A financial planner will look at the current situation of a client and all future objectives. They will analyze the current financial status of the client and then recommend a financial plan that will suit both present and future needs.

Details of the financial plan may include retirement plan contributions, portfolio of investments, a budgeting plan for all current living expenses, and projected savings growth.

Unfortunately, many people delay in preparing for the future as they are too busy maintaining their current financial situation. No matter what a person’s income level is or their future plans, financial planning is essential to any future goals. With the assistance of a financial advisor, any individual can implement successful financial goals. They will also aid in maintaining the necessary discipline to stick with the plan. And do not worry if there are changes to a personal situation, such as a birth of a child, financial plans are not written in stone. The financial planner will aid in changing things around to ensure everything is properly maintained and a person’s financial future is properly taken care of.

KDK Accountancy Corporation with Katz, Daitzman & Kiesel CPAs, LLP (an Orlando CPA Firm) is an accounting firm offering comprehensive services to Central Florida businesses and individuals. We apply expertise for our clients ranging from setting up day to day accounting systems to preparing the most diverse and complicated tax return.

Our wide range of services include accounting, bookkeeping, tax preparation, tax planning, IRS problem resolution, and all areas of financial and estate planning. We are a certified QuickBooks Pro Advisor and can work with clients with all aspects of implementing and perfecting accounting software performance in the business environment. Our services are designed to assist companies with the obstacles they encounter in order to help their businesses run smoothly and efficiently.

Tips From the Rich – How to Manage Money

If you are similar to everyone else you probably feel as though you could make more money and don’t know what to do with the money you have. The mega wealthy know how to manage money and are able to manage the lifestyle we all dream of. Here are a few helpful ways that you can turn your finances around and help you to be far more wealthy than you imagined.

Better Time Management at Work

There are ways to be smarter with how you spend your time at your job. Many of us relish the ‘water cooler meetings’ but is it the best use of your time? Probably not. Instead of talking about the most recent episode of 24, learn to be an expert on a certain part of your job, figure out something new, or find a way that will cut costs. The more you put into your job the more you will get from it. Make yourself stand out as the perfect person for any promotion or salary increase. If you’re truly motivated enough you might even discover yourself in your bosses chair.

Negotiate Your Salary

When most people begin a new job they are usually too scared to negotiate their salary and take whatever is offered. Statistics show that those that negotiated how much they want to make increased their salary by almost eight percent versus the people who did not. What’s the worst case scenario? You might just get the big fat pay raise that you want and create new ways of how to manage money.

Be More Charitable

It’s amazing how well the ‘pay it forward’ mentality works for the rich. The average household with an income of over $500,000 gave away over 6% of what they make to charities or special causes. Not only does giving back to those who need it will supply you with a lot of satisfaction and you can write off donations come tax time. If you are really on top of your finances you may even be able to put yourself into a lower tax bracket.

Own Your Own Business

As the old saying goes ‘You can never get rich by working for someone else.’ It takes a lot of work, determination, headaches and sleepless nights to own your own business. On the other hand, the sense of accomplishment, excitement and financial rewards of having your own business are immense. Before you quit your job and start a franchise that sells chocolate covered bananas, do a lot of research and make a business that can sustain you and your family. The more {preplanning you do|you plan and discover how to manage money properly, the more successful you will be. The rich don’t become wealthy by chance.

Strategize Borrowed Money

The wealthy often borrow as much money or more than the average person but they way they borrow money is very different. The wealthiest people in the world are half as likely to have credit card debt and they are also less likely to have auto loans. Most of the wealthy carry mortgages much like the average person and they are three times more likely to have loans on real estate investments. The rich know how to manage money better than most people because they wisely borrow.

Buy Into Real Estate

Do you think Bill Gates or Donald Trump rent their homes? If you want to get ahead with your finances and stay ahead you must buy real estate. Don’t purchase outside of your budget. Try to buy something that you can afford and can even fix up and sell in a couple of years for a major profit. By renting, your money is being wasted. Chances are your mortgage payment will be as much or less than you are currently paying in rent.

It may take baby steps but if you want to get ahead with your money and follow these tips of how to manage money. The wealthy aren’t rich by fluke. They usually take calculated risks and are rewarded financially in the end. You have it in you to make the same kind of decisions and start making the money you’ve always dreamed.

50 Ideas For Increasing Profits and Cost Reduction

Do you want to know 50 great profit building ideas that you can put to immediate use in your business to increase profits and reduce costs?

If yes, read all these ideas that have been implemented by clients and have benefited them giving their businesses dramatic boost in profitability. Most ideas can be put to action immediately. Each idea has the potential to give you many %points increase in net profits.

Research shows profits increase by 4%-56% and costs reduce by 18%-37% within 2 years using the simple 5 step process called the Profit Maps Model. Usually a 5% reduction in cost is adequate to turnaround most loss making businesses.

Businesses can calculate the value of the savings by these 2 simple formulas

If the business made a loss

Total Costs and Expenses = sales + absolute value of net loss +/- income tax = say X

Minimum Savings you will make in 2 years = 5% of X (which was calculated above)

If the business made a profit

Total Costs and Expenses = sales + net profit +/- income tax = say Y

Minimum Savings you will make in 2 years = 5% of Y (which was calculated above)

So how much can you save? Improve your profits by?


This category typically contains inflows of resources into the business generated through operations.

Needless to say the profit building process can be used to generate marketing and sales ideas. The following ideas were generated with the objective of increasing revenue with little or no impact on the cost structure.

Revenue Increasing Ideas

1. If your company has facilities located over a multi-geographical area you may be able to rent antenna space to cellular phone companies. Typically these companies will pay for the use of rooftops as a place to erect their antennas. Another option is for billboards as advertising if you occupy a central location with a high visibility building. This enhances your revenue without any additional cost you. The point here is to explore alternative uses for your facilities. Remember they are assets that can be used 24 hours a day, seven days a week. There are numerous opportunities available for increased revenue if you look for them. Training room and function room facilities can be rented out in the evening or weekends. How about spare land or excess slots you own for public car parking?

2. Determine whether your business can market commission and non-commissioned products as add-on sales. Look for opportunities to sell products to your existing customer base at no additional cost. Examples are catalogue sales to airline passengers and the sale of miscellaneous products to credit card customers. You may have the opportunity to do something similar. Your customers have more value than you realise.

3. Is there any additional value in your customer database? Perhaps your business could generate additional revenue by selling the data. Alternatively consider starting a telemarketing department to market another line of products or services. Depending on your business and the nature of your customer base you may have something great here.

4. Explore the advantages of an effective e-strategy including e-commerce, e-business, e- people and e-technology. There is no question that the new opportunities available through the Internet offer new and innovative ways to increase profits and reduce costs. Consult with an expert in this area including a cross-section of your employees and magic will happen.

5. Segment your customers into heavy user and light user categories and determine the difference between these two groups. What needs to be done to generate another sale from both categories? All customers are critical. What can you learn about the different types of customers to determine whether more selling occasions possible? Make the most of these customers; you already have them.

6. Develop retention strategies as well as growth strategies. In today’s markets, it is as important to hold on to your existing customer base as it to grow your business. It took you a certain amount of resources to attract your customers: you may want to explore ways to retain a high percentage. What is your cost to acquire a customer? What is your cost to retain a customer? Do your employees know?

7. Continue to look for augmented products and/or services that would add value without adding expense.

8. Explore opportunities to licence or franchise your business products or services for additional market share or penetration

9. Explore merger and acquisition scenarios where efficiencies would be gained for all businesses concerned.

10. Develop a relationship with a long-distance carrier whereby your company will distribute phone cards to your customer base in return for a fee or residual commission.


This category typically contains charges associated with

  • Management Pay
  • Non-management Pay
  • Hourly Wages
  • Training Labour
  • Overtime Pay
  • All Other Pay, Wages and Salary items

Cost Saving Ideas

11. Establish a 45 to 60 hour per week work environment among the managers. Cost structures among your competitors are basically similar to your cost structure so you will obtain an advantage because your managers are working more hours. This assumes that your managers are productive. Managers who have responsibility for a workforce of hourly employees are usually at the facility, a retail outlet, restaurant or office at least this amount of time. Sometimes business volume is extremely low at early or closing hours. During the slow hours managers can save substantially by scheduling fewer employees and filling it themselves. In addition to the Labour savings, managers will become more knowledgeable about operations and will find ways to improve customer service, training and operations. I have put this procedure in place in several places. At the beginning there will always be resistance, but once managers get beyond the initial hump things will run smoothly. I also find that certain incentive programmes work well here. Get the manager’s incentives based on Labour dollar saved and they come to understand the process.

12. Effectively manage your salary administration programs. Many companies pay lip service to this principle but failed to obtain true levels of success in salary administration and management. To start, make sure you have a salary range for every position in the company. Salaries should be structured so that the midpoint is 100, the minimum is 80% and the maximum is 120%. The basic philosophy is that the candidate should be hired into a position between the minimum and the midpoint on the basis of his or her level of experience. The employees are then moved higher in the range on the basis of performance. This philosophy is based on the premise that mid-point is the amount the position is worth to the company. Employees can obtain an additional 20% through stellar performance. Few employees should be paid over the 120% range. Each job is worth a specific amount to the organisation. If a new hire needs training to become efficient in a particular job, that employee is working at a level below the worth of the position and therefore should be paid at the minimum salary range. When the employee’s performance rises at successful completion of training and can perform 100% of the job duties move the employee quickly toward the midpoint of the salary range.

13. Insist that a salary survey be done every year to ensure that you have achieved the desired community position relative to your competition. In this case the competition is those companies that would recruit your employees. You need to make sure that if you survey 10 competitors; you have a salary range higher than 75% of these companies for your key positions and higher than 50% of these companies for lower-level positions. Implementing this strategy will help you reduce turnover and will also ensure that you are not overpaying for positions.

14. Make sure your salary administration program allows for regular salary review. Typically, this is done once a year for salaried employees and every six months for hourly employees. The review should include a performance appraisal form and the employee’s performance levels should correspond with established pay increases. In other words, establish the pay for your performance review system.

15. Establish a bell curve of salary increases. Let’s say that approximately 8% of your employees are superior performers, 12% are above average, 60% are average, 12% are fair, and 8% are poor. Create a salary increase guideline that mirrors this curve, with the better performing employees receiving higher increases. For example superior employees are given 6% to 7%, above average employees 4% to 5%, average employees 3%, fair employees 2%, and poor employees 0%. This allows the organisation to check and reward performance whilst still meeting its salary increase budget. Obviously, your goal is to continue to train and develop your workforce. Occasionally, low performing employees have to be replaced with those most suited to the position. The Bell curve is just a process to ensure that star performers are recognised and rewarded for their work.

16. Establish the salary increase guideline budget and stick to it. Plan salary increases for the coming year by using the Bell curve mentioned in the above idea. Department managers should budget salary increases for employees assuming that the next year’s performance will be at the same level as this year’s. Please be aware that some performance ratings will change. There will always be exceptions. This process will help ensure that your organisation will remain within the new salary increase budget.

17. The salary increase guideline budget should be preapproved. When a different rating is submitted during the year, treat it as an exception and make sure to justify it because performances can change- it may go up or down. A strict salary administration program will ensure that budgets are achieved.

18. Establish a training rate for all appropriate positions. This is crucial when your organisation experiences higher levels of turnover during the first and second months of employment. The training rate is lower than the standard pay rate and is applicable only during the training period. Employees are given a raise once the training has been completed satisfactorily. Determine whether the training rate could be established for other positions in the organisation.

19. Where the training rate is not appropriate, establish a probationary rate for the standard 90 day period. This rate is lower than the standard pay rate and is applicable only during the first 90 days of employment. If performance is satisfactory, the employee will receive a raise to the standard pay rate. Determine whether a probationary rate could be established for all positions in the organisation.

20. Develop a labour-management system whereby a computer predicts daily or hourly volume and the amount of labour needs on the basis of seasonality. Most businesses have a trend cycle that can be measured with 15 minute increments. First, you must find a way to get past the notion that your business cannot be tracked this way. There is a pattern to your business. Discovering your business pattern is the first step toward determining how to manage your Labour cost. Management will give you many reasons why the business cannot be tracked. Once you work through all their concerns, you and your team can identify those trend items, aspects of your customer behaviour that, in fact, can be tracked and schedule Labour accordingly.

21. Determine whether your new hires would qualify for the targeted job tax credit program whereby a percentage of training dollars is refunded by the government.

22. Determine whether your organisation would qualify for tax benefits for providing employee childcare services.

23. If your employees handle cash transactions, install software driven cash reconciliation process to save time at shift changes and at closing. This will also reduce cash shortages. This type of procedure also saves time in the cash out process.

24. Constantly look for software modifications that can reduce labour. Seconds saved could also mean dollars earned. Using technology is a natural approach to the whole effort of productivity improvement. If your business has not recently explored this area, effective tools that currently exist may surprise you.

25. Have an industrial engineer evaluate your business in terms of time and motion studies to determine whether additional efficiencies can be achieved in areas where high throughput is important. This approach can still work today. Some managers run their businesses the same way they did 10 or 20 years ago. Time and motion studies can have an impact on cost savings, productivity, customer service, and employee morale.

26. Establish a self-regulating team with the specific responsibility of improving productivity and reducing costs in a particular department or area of the organisation.

27. Develop an incentive to reduce absenteeism. This incentive should be linked to productivity improvement goals and to the availability of the workforce. It should be based on reducing absenteeism from previous period. The incentives could be a vacation bonus based on a 1% reduction in absenteeism

28. Develop a variable pay program whereby management salaries are reduced 5% to 10% across the board and these dollars are set aside into a bonus pool. When there is goal achievement, managers have the potential to earn even higher levels of compensation. However, these dollars will be at risk if managers do not achieve profit objectives. The potential to earn even higher levels of compensation will help sell this item.

29. Controlling your staff turnover is another way to reduce operating costs. Implementing strategies throughout the entire human resources cycle to ensure that all systems, procedures, policies, and practices are tight preventing employees from falling through the cracks. I refer to this as the human resources closed loop. If you think about it you will see that there is a cycle to the human resources process. It starts with recruitment, interviewing, selection and placement and continues to orientation, training, salary administration, performance appraisal, development, promotion, and finally termination. Then the cycle begins again. Make sure that all of the areas mentioned are employee friendly and are designed to retain employees. Identify any areas where improvements would reduce the number of employees leaving.

30. In order to determine where are to place additional controls, measure your labour costs in terms of cost per unit, cost per test, cost per guest check, etc. Breaking your labour costs down to the lowest unit will help you better identify cost saving ideas. It will also make it easier to affect and control.

Other Personnel Costs

This category would typically contains charges associated with

  • Applied Payroll Burden
  • Superannuation Employers Portion
  • Vacation
  • Paid Holidays
  • Sick Leave
  • Bonuses
  • Short/Long term disability
  • Group medical

Cost Saving Ideas

31. Make sure your company has a program that offers all full-time employees the opportunity to receive a higher salary in lieu of accepting certain benefits (such as medical, dental and life-insurance). Today many employees are being carried on a spouse’s plan. Why not let these employees choose a higher salary instead of benefits? As long as salary increases less than the cost of benefits, the company will save money and employees will increase their income.

32. Evaluate the cost of your superannuation administration. There are competitive programs that can reduce administrative costs. A simple evaluation of three different companies will determine whether you have an opportunity to realise savings. Even if you do not want to change the current superannuation administration you may still be able to negotiate better terms by showing your evaluation.

33. Reduce workers compensation insurance by aggressively reducing accidents. Evaluate your workers compensation actual to determine your claims history. Most companies set an actual rate and never re-evaluate them even though their experiences change. Depending on your business you may be surprised at the potential savings here.

34. Using the Internet conduct benefit surveys to comply your cost with those of similar organisations.

35. Challenge third-party providers to reduce administration costs by using the Profit Maps Model and passing those savings along to you.

36. Continue to monitor workers compensation costs and develop action plans to reduce them.

37. Develop a back to work programme that puts injured employees in alternative positions. There are times when injured employees want to remain active in the organisation and appropriate positions are available.

38. Negotiate settlements when long-term workers compensation situations dictate.

39. Eliminate alcohol at all company sponsored activities. This approach can prevent accidents, cut beverage costs at functions and reduce risks.


This category typically contains charges associated with

  • Long-Distance Telephone
  • Cellular Phone
  • Pagers
  • Data lines
  • Fax lines

Cost Saving Ideas

40. Authorise a telecommunications consultant to analyse all your communication costs in terms of rates charged, equipment used, and programmes offered, promotions available, usage, cellular phone options, long-distance carrier performance and pricing, fax and security line combinations, past bills, and so on. Structure the contract so that the consultant bills on the basis of percentage of cost saved or refunds received. In this way, there will be no cost to you if the consultant is not successful in improving your bottom line. Review all areas of communication to ferret out these pockets of expense that often go unnoticed. Pagers and cell phones are usually ordered and distributed without the benefit of an organised plan. There are real and meaningful discounts if you shop around.

41. Continue to renegotiate rates and terms with the vendors who provide services. Set up an ongoing procedure for constantly renegotiating rates and terms.

42. Monitor and control your communications cost on the basis of the cost per unit test (guests check, or that like) in order to determine locations for exerting any additional control.


In this category typically charges associated are

  • Gas and Electricity Usage
  • Water

Cost Saving Ideas

43. Authorise a utility consultant to analyse your utility costs. Such consultants would know how to deal effectively with the local public service companies in order to discover advantages or missed opportunities associated with gas and electric services. They should be fully authorised to check existing equipment and records. They should be experienced in developing an index and analyses and creating demand graphs to spot situations where you may have been overcharged. They would also represent your issues to the public utility commission.

44. Pay your consultant on the basis of a percentage of the savings associated with his or her action steps. The typical rate is 25% to 30% of the demonstrated savings and refunds over a specific period of time. There should be no charge if savings are not demonstrated.

45. Take energy conservation action steps including setting thermostats at 72°F. Automatic controls should be put in place to control temperature during off hours.

46. Turn off lights in conference rooms, restrooms and officers when they are not in use.

47. Turn off all lights not related to security at the close of business.

Professional fees

This category typically includes charges associated with professional services such as

  • Legal and Human Resources Related Fees
  • Proposals (domestic and international)
  • Fees for Technical Services
  • Other professional fees

Cost saving ideas

48. Talk about fees. If your lawyer does not bring up the subject of fees, you should. Do not be shy. In business, lawyers are free to set their own fees. The best time to discuss is at the beginning of a new legal matter.

49. Try to settle cases rather than litigate.

50. Have lawyers design standard forms you can use in routine transactions.


The more you understand the power of this list, the more you’ll realize you must get your hands on all the other ideas to benefit your business. Go to [] to obtain and use a simple 5 step process that can do this for your business.

As mentioned each idea has the potential to increase your net profit margin by many % points. Research shows profits increase by 4%-56% and costs reduce by 18%-37% within 2 years. Usually a 5% reduction in cost is adequate to turnaround most loss making businesses.