The smart money series: 3 ideas to stop wasting money

Sylvia Borken, at the family store, Knox Market, at Knox and Plymouth Avenues in North MinneapolisLast week, we talked about how businesses could easily lose money. This week, we’ll think about ways we can save money or increase revenues without doing more work.

  1. Save money: Go paperless. As we saw last week, sending a bill by regular mail costs about a dollar. When you invoice your clients via email, there is no paper to print, no stamp to buy and no waiting for the letter to reach the client. Plus, most businesses already have email accounts, so there is no additional cost to email the invoices.
  2. Increase billables: Tie complete timesheets to payroll. Often the challenge is not to know what to bill and what not to bill the client, but getting the information from the employees who do the work. One of our clients fixed the problem bluntly: he tied the employee time sheets to payroll. Even the salaried employees. This helped getting everyone’s time worked before payroll cut-off, and has helped getting all the billable information in the time and billing system.
  3. Save time: Automate invoicing. Instead of building each invoice individually, smart businesses automate the process. It can be done with a basic mail merge in Word, or it can be done with a professional time and billing system like Abak. With Abak, the time required to produce the invoices can be cut down by half or even more. This means clients get their invoices faster, and businesses get paid faster too!

What about you? How do you save money in your business?

Find the margin thieves in your projects

James WilliamsProjects can easily start off with a good profit margin, and end up at a loss. Even if the billable rate is twice the cost rate for a consultant. Even with plenty of margin for error when the contract was quoted and signed.

As the project moves along, margins thieves get into the project and eat away at that comfortable padding we added to the contract. These margin thieves can go undetected until the end of the project, when it’s too late. Margin thieves often take the form of non-billable items that are not logged correctly to the project. For example, it can be time logged in an internal project or not logged at all, or an expense mistakenly absorbed in the overhead costs of the business. When the project closes, the administration team corrects those mistakes, and our profit margin melts away.

How can we fix this and prevent the margin thieves from going undetected? Here are 5 suggestions:

  1. Make sure all expenses are logged to the project. This includes non-billable expenses, like parking fees or employee’s expense reports.
  2. Make sure all time worked on the project is logged to the project. This includes non-billable time, such as technical support time or administrative time.
  3. Make sure to log all supplier and contractor costs to the project, even if it’s non-billable.
  4. Run your budget control report religiously. If all expenses and work hours are logged, the report will tell you, in real time, how much the project has cost so far.
  5. Set up a workflow alert to email the project manager when budgets are in danger.

Would you like to know more about these 5 tips? Let me know!