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Top 3 ways SMEs can reduce business debt

Date Added: 20/01/2014  

There are plenty of ways to save money when examining your personal outgoings, for example, comparison websites can help you get the best deal on your mobile phone and broadband deals. But what can the owners of small and medium enterprises (SMEs) do to save money for their companies?

Staff costs

A SME’s first quarter of the year will more than likely be dominated by staffing decisions as existing employees look for greener pastures and company bosses decide whether to bring in new talent.

Jane Asscher, founding partner of business management advisers 23 Red, shared two simple tips with The Guardian to save money on wages and recruitment.

She said: "If someone leaves the company, resist the urge to replace them immediately."

It may seem odd, but Ms Asscher believes that postponing finding a replacement could mean the hole left gets filled by other ambitious employees willing to pick up the reins. If the gap still needs filling after the delay then you’ve saved money in the meantime.

Her second tip revolves around recruitment. She said: "If you do need to recruit, encourage your employees to be headhunters and pay them a bounty for new recruits."

Energy costs

Research from the Carbon Trust revealed British SMEs could collectively save £300 million every year by taking simple steps to reduce the amount of energy they use.

The study revealed that 92 per cent of workers were concerned about the costs of energy at home but only 47 per cent thought about their employer’s bills.

Businesses should encourage their employees to become more energy conscious at work. 

Simple things like shutting computers down when they are not in use and only turning the lights that are needed on can save a company thousands of pounds.

The same principles should apply to heating - only parts of the office that are being used need to be kept warm.

Outsource bad payers

Bad debt is an issue for companies of any size. It can take up staff time and businesses can incur interest charges for dipping into overdraft facilities - which could have a knock-on effect on their credit rating.

Why not take the burden off your company and use a specialist to chase bad debt? 

When prices start from as little as £2 for an opening warning letter to a bad debtor, it seems crazy not to use this kind of service.

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