When it comes to fixed expenses, personnel, data processing, interest, insurance and advertising are the big five. However, don’t stop your examination of possible cuts there. There probably are more cuts to find.
Recently, one dealer thought cutting fixed expenses by $400,000 was all that
could be done. After a review by an outside accounting firm, though, another
$100,000 was identified for the chopping block.
Where do you look and what do you do to find cuts or to create savings that may seem to be pennies, but in reality can add up to big savings?
Utilities, office supplies, have an approved vendor list, ask employees to
analyze expense accounts, and revise the pay plan for managers so they are
paid on net profit instead of gross are starters. But wait, there’s more!