It’s no hidden secret that everyone is always looking for ways to make their business more profitable. However, business owners often look at increasing revenue as the most important aspect of increasing profitability. This is just not the case. Actually, it’s often internal processes and management which holds the key to becoming more profitable. For most businesses, time is perhaps the biggest cost. Both the director and employees’ time is finite and is often seen as a necessity to expand the business. In reality, as an owner has to wear ‘multiple hats’, often they can save time by picking the most obvious option for a product or service or sticking to a manual process that requires no research or thought. In reality, it’s these areas that can drive down your overheads, save money, and increase your bottom line. We’ve outlined some of the common ways to increase your profitability:

1. Review your bookkeeping methods

Are you still using word docs or manual invoice templates? This could be wasting your time and money, stopping you from achieving that extra profit. We advise you to switch to an accounting package such as Xero. This will increase your bookkeeping efficiency, which in turn saves you time and increases profit. For businesses with an accounts team, consider outsourcing bookkeeping work to a third party company. Often this is cheaper and more reliable. Switching to cloud-based accountancy software will reap many benefits to increase your company’s efficiency. This will allow you to automatically sync up all of your bank feeds, which can literally save hours on reconciling payments.

2.  Identify what’s taking up considerable amounts of time and seek alternative solutions

It only takes a small amount of time out of your day to see what isn’t working and where you can make some improvements. We advise you to do this every 3 months or so as it will help you to keep on track of your solutions and if they’re working. Here are a couple of ways that we can think that will help improve efficiency and profits:

• If you’re still quoting for work in a traditional format, consider using purpose-built tools such as Proposify which allow you to create templates and quickly edit documents online. 
• Shut down any fixed landlines and switch to a VOIP service. Usually, these are considerably cheaper, include more minutes, and can connect to your mobile – no more forwarding calls at an additional cost!

3. Project management tools

Time-management is crucial for keeping everything running as efficiently as possible. It won’t matter what industry you are in, keeping to strict schedules will increase your businesses profits tenfold. Making and managing that time can be a hard and quite daunting task though, but it doesn’t have to be. So, whether you’re a property developer or a web designer, Asana, along with many other online tools,  will allow you to manage your time and your employee’s time more efficiently. It will become easier to track projects and tasks which overrun and cost the business more than anticipated.

4. Manage customer information more efficiently

Ecommerce aside, most businesses will require customers to supply them with information or onboard them in some way. As an accountancy firm, we require lots of basic information and it’s often tempting to receive this in many different formats across email and in the post. Look at switching this process into a digital form. It’ll save time managing the information once it’s received as it’ll all be in the same format and it will reduce the number of phone calls asking questions as you can include key information within the form!

Overall, in most cases efficiency increases profitability and it’s also a great way to increase the value of your business. By making your business run efficiently it means that both yourself and your employees have more time to focus on more important tasks. We’ve also only picked a few ways in which you can increase efficiency but there is such a long list of ways you can save time and money. Different methods work for different businesses so if you’re already on top form with these 4 there are still lots of different ways to increase your efficiency even further. If you need any help, we can help with all your business accounting services – speak to a member of our team about booking a free consultation here. As part of forecasting and planning, we can take a look with you at some of the areas you may be able to save money.