Costs in Business

Costs in Business. It is always a good time to keep an eye on costs in an organization. Financial reporting is a great way to look back on what happened; it is more important to look forward to see what can be proactively addressed. There are three areas to focus on regarding controlling expenses. The first is keeping a lid on what employees spend; the second is being open to revisiting direct costs; and the third is finding ways to reduce indirect costs.

An early mentor explained, demonstrated and proved the results of his philosophy about watching what employees spend. While running one of the smallest divisions in a billion dollar corporation, “Wild Bill” Sweeney scrutinized and challenged the expenditures that impacted his bottom line.

When reviewing an expense report for one of the managers who reported to him, Bill asked “Do you have appetizers at home on Tuesday night before you have dinner with your family?” The manager replied back that he did not eat appetizers at home and Bill said “Why would the company pay for you to have both appetizers and dinner just because you are on the road? You can have drinks and appetizers or you can have drinks and dinner, but from now on, you won’t do both. If you watch the pennies the dollars will take care of themselves.”

Furthermore, “Wild Bill” proved that there was a method to his madness; his division, though small, was, year in and year out, the most profitable division in the corporation. Bigger isn’t always better in the business world, keeping costs down and making the business profitable matters. Bill did this through leading by example, setting and enforcing standards.

What Bill didn’t say, but wisely demonstrated, was that every employee has the capability of spending more of the company’s money than might be prudent, if left unchecked and unmonitored. As one business owner stated, “Every employee believes they have a license to spend the company’s money.”

While most companies think that they do a superior job of controlling direct costs (core expenses) many could benefit from learning what takes place in other industries. All too often people scoff at ideas that come from the outside, but industry blindness breeds arrogance and decline.

That narrow minded thinking can be expensive, both short term and long term. Starbucks looked to the quick serve/fast food industry to standardize their “daily blend” offered each day. This reduced costs in every store and reduced the number one complaint of customers which is waiting in line.

The movie industry has started to implement assigned seating in more upscale theaters, something they learned from the airline industry.

A business owner in the food industry commented that he was seeking to create a Volume Incentive Plan (VIP) to present to his vendors where the more he purchased from them the more his vendors would rebate him. That idea was quickly jumped on by an owner in the distribution business who had never considered asking his vendors for any kind of rebate program on core purchases.

The lessons are clear: don’t be afraid to learn what others are doing to reduce core costs and don’t be afraid to ask for something that will reduce the direct costs that impact gross profit. Kevin Rumsey speaks regularly on the subject of reducing expenses. According to the research conducted by Alliance Cost Containment, the average company spends 20-30% more on procured goods and services than is necessary.

Indirect goods include office supplies, janitorial services and supplies, fuel, travel costs (hotel, airfare, car rentals), insurance of all types, utilities, printing, shipping expenses, telephone and communications charges, computer supplies, pest control, temp services, uniforms, furniture, payroll services and many more.

The paperless office never came to fruition because paper sales have never been higher; growing at almost 15% per year and printers, copies and expensive ink cartridges are right behind.

The average company spends 3-5% of their total revenue on document imaging alone, which includes copying, printing and faxing. In many companies, personal use of the printers and copiers account for a majority of the use of paper and ink. Color copying runs 2 to 4 times the cost of black and white. Having the default setting on every copier to black and white and using less expensive copy paper will result in immediate savings.

Another impactful way to save money is to start turning off lights and computers when not in use. Putting timers and motion detectors on lights and putting the HVAC system on a timer can’t hurt. To sweeten the pot, many utilities have rebates and other incentives to help organizations reduce energy costs.

Kevin believes that “There are few areas in which to save $1 million, but there are a million areas in which to save $1”. There is no time like the present to start watching where the pennies are being spent.

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Mortensen Law Can Help

Mortensen Law Can Help. Do you have a disagreement with the IRS over taxes due? Have you inherited a difficult-to-value asset on which you owe an unreasonable amount of estate tax? Were you audited and received a notice of deficiency? Did you get caught in a tax trap and owe a huge debt to the IRS you cannot possibly pay?

We can help you:

  • Assess the true value of the asset in question
  • In many cases, lower your debt by identifying valuation discounts
  • File and advocate on your behalf in an IRS appeal
  • Petition the federal tax court, or
  • File an Offer In Compromise with the IRS

Furthermore, Valencia Law Office of Daniel Mortensen is a Board Certified Tax Attorney who has been assisting clients with complex tax problems in Southern California since 1996. He also has a post-doctoral degree, LL.M., in tax law.

Tax Law Valencia California
In other words, estate tax applies to any assets you leave to your children, siblings, friends and even parents. Under current law, until 2008, everyone receives a $2 million federal estate tax exemption. This means that no estate tax is due on the first $2 million left regardless of recipient. There are some caveats, however, that make the application of this exemption more complicated than it sounds. For example, the $2 million includes any death benefits on life insurance owned by the decedent or where the decedent had any of several specific rights in connection with the policy.

Mortensen Law
Trust & Probate Attorneys, P.C.
22807 Lyons Avenue
Newhall, CA 91321
Santa Clarita Trust Lawyer

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Choosing the Right Reference for a Resume

Choosing the Right Reference for a Resume
When creating a resume, some of a job applicant’s most commonly asked questions are — “What is a good reference?” and “Who should I put as a reference?”.
The Reference section is a list of people, included in the resume, who can authenticate the information that the applicant provided in the resume. References play a major factor in employment. Usually, the people listed in the reference are contacted by the employer after a successful initial interview with the applicant. It is with this regard why job seekers must seriously ponder who to put as reference.
Fresh graduates, or those who have no previous jobs, often write former professors, advisers, and coaches as references. On the other hand, those with previous job experience often include past employers in the list. These people are usually chosen because they possess credibility and integrity that comes with their job. These kinds of people are excellent references so long as the applicant makes sure that he has a good relationship with the people he included in the list. It is also necessary that those people have good opinion about the applicant.
Before including someone as reference, one must first inform the people he will put in the list. They must be aware that they are being included so they would be aware on what to say when the employer contacts them. The applicant must also be sure that they are willing to give good assessment to him. Talk to them. If the applicant is having doubts about the person, do not include him.

Super Job For You gives information on how to get a job and how to hire good people. If you are looking for Cast Parts Jobs look at this website. This Castings Blog will give you more information you can use for manufacturing.

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Article – Basic Designs of Roof Tiles

Super Jobs For You,

We have published new article to the blog in our Tile Mold website. Basic Designs of Roof Tiles
Basic Designs of Roof Tiles. If you plan in using design concrete roof tiles for your house, you should be aware that choosing the best tiles for your house is arduous, especially if you lack the basic knowledge on some of those types To help you make your pick …
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