Six Biggest Ways Your Company Loses Money Every Month

Most companies understandably focus on profits as a measure of a success, but often forget that financial losses are equally as important to pay attention to. Below explains six of the biggest ways companies around the world lose money and how you can avoid these common pitfalls.

Poor Accounting
Every company should have a clear picture of the profitability of every order, product, and project under their management. A surprising amount of companies actually don’t closely track specific costs. Without versatile accounting software, it is very difficult to analyze and understand expenses and where they are coming from. Management must continually monitor their return on investments in order to eliminate unprofitable products and projects. 

Hidden Fees
Hidden fees may cost companies hundreds of dollars every year. This could include things such as “cost creep”, where a price on a bill slowly increases every month and invisible charges, which continue to bill you after you have paid for canceling a service. Major banks and phone companies have famously tried over the years to add convenience or account management fees to big company spenders. Be sure to instruct purchasing and accounting to closely review all bills or invoices before paying them.

Buying vs. Renting
Maintenance departments love to have new equipment and tools and as a result, major projects are a great chance to buy equipment that may only be used a few times. Always consider renting equipment instead of buying. This will also allow the maintenance department the chance to prove the multi-functional value of any equipment they want to buy, though it is often cheaper to rent instead of buy.

Smartphones vs. Desk Phones
Many companies are simply doing away with desk phones in favor of smartphones because more and more employees do not require a work phone. In fact, employees with smartphones can perform almost every necessary job function while on the road. Desk phones are an expensive, obsolete necessity in the digital age.

Bundling Services
Consumers aren’t the only ones who can save money from bundling services. In fact, the larger the company, the more sway they have with negotiating better prices. As more and more companies outsource to third-parties, there are now better options available.

Inadequate Software
Most members of management don’t have an IT background, and it is easy for them to misunderstand IT needs and functionality. Inadequate software management programs are considered a low priority, but most new software programs are simple, flexible and affordable. If you struggle to keep track of bills, grants and payments online upgrading to a better grant management software like the ones from IT Works can save you a lot of money in the long run.

There are several proven ways every company can reduce or eliminate financial waste. Look into where you think you might be losing money and find better ways to upgrade.