How to reduce costs in a company?

Jul 29, 2021 | Invoice Management

Where can I cut back when expenses exceed income? How do I balance my Where in the budget do I put some investment without In short, what financial measures can I use tomake the business more profitable and get more out of it?If you are a manager, you have probably been assaulted at some point by these classic questions. In fact, as they are recurring questions for many finance managers, it is likely that they are going around in your head at this very moment. How can Imake a company moreprofitable?reduce costsAt easyap we don ' t have the magic formula to answer them, but we do have a long-standing successful experience and ideal solutions that we can help you with.

Areas where you can cut costs in a business

Any business, no matter how big or small, is made up of .It is true that, depending on the size of your company, the financial controls will be more exhaustive and, at the same time, complex for the simple reason that the volume to be managed will be greater. But, no matter how small your business is, there will always be ways to optimise the resources you have available. In fact, the objective of implementingmeasures to reduce costs in a company is to achieve that the balance is positive and the project you have in hand is profitable. That the company is profitable, in order to
Let's take a very simple example. If you are self-employed or if you market a basic product , you probably work with a supplier of a specific material to whom you pay . In this case, a thorough study of how much and why you pay him is a first step that you should carry out from time to time. Then, afterwards, you can analyse the market and study whether you could really buy that product or service from another supplier at a price thatyou can afford.
In the case ofmanagers and financial directors of large companies, the question The items in which cost reductionscan be applied are very many and it will be necessary to study in which ones and what effects each measure has. Of course, also the impact will be greater the bigger the budget you manage . Therefore, first of all, the first thing you should do is to carry out a financial study to analyse where we invest more and less and where we can obtain more benefit. xm
With this analysis we will be able to establish aprofitability methodology and plan where and how to apply cost reduction, i.e. to develop a strategy financial. These costs will depend on each company, but, broadly speaking, the majority of companies will be able to apply these measures to reduce costs in the 5 main areas that we consider in easyap:
  1. Staff and staff costs.
  2. Employee and company insurance and taxes.
  3. Investments in various areas and supplier costs.
  4. Automation and management of internal processes.
  5. Fixed and material costs.
Next, within each of these financial concepts we are going to go to listing several typical costs that affect the profitability of many businesses. Expenses that, although you know are in your accounts, perhaps you are not controlling too much and are losing you money. You will really know what the line item is at .which you should reduce or limit spending, or, who knows, eliminate it altogether.

1.Staff and staff costs

This is perhaps one of the most painful measures for managers and for those However, as we all know, there are occasions when the number of employees exceeds the production levels of a business and it is not profitable to have so many workers. Therefore, reducing your workforce at a certain point in time or in specific departments with lower profitability can be a way toreduce costs.

2. Employee and company insurance and taxes

Along the same lines as the previous point, if you want to reduce costs, the issue of taxes and insurance you pay is also something to take into account. And, above all, analyse the concept for which you pay them. Per diems, for example, are one of the few items in Spain that can still be taken out of the payroll, so you can end up saving money if you record them correctly in your accounts. 

On the other hand, the taxes such as IAE or IBI can vary depending on the municipality and the cadastral value of the municipality, implying surcharges that you may not always have to face as such. These include capital gains or charges such as rubbish collection that do not always have to be borne by your finances. So, here is some advice: check these tax costs and whether you are dealing with them in the right way.

3. Investments in various areas and supplier costs

Obviously, businesses allocate part of their budgets to investments or improvements: R&D&I, environment, etc. Do you know that for these investments you can benefit from many tax incentives? Did you know that for these investments you can benefit from many tax incentives? Well, check your expenses and see which ones you are eligible for and if you are currently doing so.

Something similar happens with suppliers, as we indicated at the beginning of this article. Every business needs certain suppliers. But, are yours the cheapest? In this globalised world, have you tried looking for cheaper suppliers from other places?

4. Automation and management of internal processes

And while we are on the subject of globalisation, what better way to take advantage of all the benefits offered by the digital world than to reduce costs in other areas as well. In the past, the time and human resources devoted to documentation, information management, databases, etc. were enormous. Fortunately, the savings How? By implementing and using systems, software and solutions such as easyap.

By automating processes using new technologies and digital tools, significant savings in time and personnel can be made. significantly saves time and personnel. The latter two resources are extremely useful in any business, and as a manager you can allocate or invest in other tasks in your business.

5. Fixed and material costs

In your accounting, other costs that you have to review as a financial manager are the fixed costs. We are talking, for example, about the rent of an office. Consider whether you really need a space like the one you have and whether eliminating it can help you reduce business costs. Even more so at a time when teleworking times in which teleworking seems to be here to stay.

On the other hand, consider how you are managing the costs involved in shipping your products to your customers. We are talking about the the cost of shipping your productsthe packaging of the products, if the returns even, at this point, we recommend that you also check your electricity, water, telephone, internet or gas bills. electricity, water, telephone, internet or gas bills that you may be paying that you may be paying and that, perhaps, with other companies will allow you to reduce costs.

How to reduce costs in a company with the easyap solution

As you can see from the above, it doesn't matter what sector your business is in. If we are talking about reducing costs, many of the expenses we have listed above are present in the balance sheets of any business. It is true that depending on the market they will have one or another name, but some of them will certainly affect your business. 

At easyap, where we have more than 20 years of experience in financial management, we offer e-invoicing services that are already used by companies in multiple markets and countries. Services with multiple benefits to reduce some of the administrative costs you may have in your business.

We are talking, for example, about the classic employee costs, which can be a cost overrun that you are detecting in the administration of your business and you don't know how to control and limit it. Another example of how to save with easyap's solution is at any point in the invoicing process. As everything is digitised, the information is stored and managed in a much more agile way. Moreover, as the easyap service complies with all technical and legal requirements and is interconnected with the AEAT's electronic headquarters, you won't have to worry about tax-related cost overruns or fiscal problems.

Therefore, slow down, study, rely on professionals to help you with your financial management and reinvest where you really need to excel.

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