Unexpected expenses make it difficult to balance the company’s books. When shareholders are relying on the company to hit its earnings targets, additional expenses not in the original budget will surely throw a spanner into the works. To avoid this situation from happening too often, here are 5 tips you may want to follow.
1. Don’t Forget the Workplace Safety Meetings
While much attention has been focused on other news stories catching the world’s attention, the eye may have been taken off the ball with safety. That’s not anyone’s mistake, but it’s a fact of life. Certainly, don't gloss over workplace safety. Because many staff members have not been on the work premises for many months, the usual procedures to keep everyone safe can easily be forgotten or overlooked. So, running a workplace safety meeting is crucial to refresh everyone’s memory. This is aimed at avoiding a slew of unfortunate accidents because workers aren’t focused sufficiently on safety yet.
2. Work Out Your Budget Expenses Accurately
Some company budgets are based on last year’s numbers. There has been considerable inflation since a year ago that may make those figures inaccurate. The cost of imported raw materials or produced goods for use within the business is often significantly pricier than the year prior. So, don’t get caught out.
Also, for new additions to the budget this year, don’t make assumptions and put down rough costs due to time constraints. If necessary, delegate the research task to someone else in the department to pull together an actual cost figure. This way, the budget will be more accurate with fewer surprises down the line.
3. Spend Up on Maintenance and Repairs
Well maintained equipment serves several purposes, including:
Fewer breakdowns – It is more reliable than it would otherwise be because it is being maintained well, serviced on time, and parts replaced where needed.
Repaired sooner – Repairs performed sooner usually cost less than leaving them until later. Oftentimes, small problems not remedied earlier grow into much larger ones later. And then they’re costlier too.
For the reasons above, it’s vital that you don’t neglect maintenance on your company equipment. Not only will this ensure that your equipment is safe for your employees, but it will also save you money in both repairs and a lack of company downtime.
4. Avoid Overproduction or Excess Ordering
Ordering products to sell to consumers or overproducing products in your manufacturing facility can lead to an excess of inventory that’s not selling.
While it’s always extremely difficult to anticipate demand, paying closer attention to supply and demand signals now is highly beneficial. Having to write down part of the inventory because of the above excessive stock levels is one expense that no company needs to drag their financial results into the red.
5. Pay Attention to the Design Side
When a new product design is poorly done, then only when it’s run through several prototypes are the mistakes spotted. Such a situation can delay the launch of the product and lead to increased expenses to redesign it.
However, it gets worse when the issues aren’t spotted until customers begin complaining about the product after it has been available for a while. In which case, it needs re-designing to fix the problems and a possible product recall is likely if the failure is extremely bad too. All of this will add alarmingly to the expenses born that financial year.
Unexpected expenses are sometimes unavoidable to some degree. Yet companies must work to prevent them from becoming a regular thing. Keep the above tips in mind.