Cost-Cutting Audits

Cost-Cutting Audits

Insight from HBR.

When it comes to cost-cutting, businesses often fall into the trap of trimming the obvious – fewer office snacks, skipping that big conference. 

But a real cost-cutting audit is about digging deeper into your spending, finding areas where dollars are slipping through the cracks, and putting those dollars back where they belong (hint: not the snack budget). 

It’s not about penny-pinching; it's about being savvy with every dollar. Here’s a quick checklist of things to audit when times get tough.:

1. Software Subscriptions

It’s shocking how many tools and services we sign up for without fully using them. Companies often pick up software left and right, justifying each purchase as “only $30 a month” – until it’s ten subscriptions later, and that budget line’s ballooned. 

Chances are, you’ve got overlapping features – like two different tools doing 90% of the same things, with that tiny difference you're barely using. 

Pro Step: List every software you pay for monthly, list their features, and identify any overlap. If you’re only using 30% of a tool, consider saying goodbye to it.

2. Marketing

Many businesses throw money at ads or campaigns, cross their fingers, and hope for magic. But without a roadmap that guides leads from the ad click to the purchase, you’re basically throwing cash into the wind. 

First, outline your marketing strategy, mapping out each step from lead generation to conversion. If you can't directly link a tactic to conversions, consider cutting it or finding a more strategic use of that budget.

3. Taxes

Ever had your accountant tell you after the fact that you could’ve saved money with a different tax strategy? 

That’s a missed opportunity – and it happens too often. Instead of meeting with your accountant at the last minute, schedule regular check-ins to discuss current tax-saving opportunities throughout the year. 

Proactive tax planning can help you lock in deductions or credits that would otherwise slip by, and that means more money saved.

4. Payroll

Here’s a common trap: hiring ‘middle’ talent. It’s not that the mid-level hires aren’t great, but you may be paying a higher salary for tasks that could’ve been handled by more junior talent – or by a specialist for a few hours. 

The trick is to assess the exact skill level needed for each task and to allocate hours wisely. With today’s gig economy, you can cherry-pick the expertise you need without paying full-time salaries across the board.

Action Step: Identify specific tasks that can be outsourced at different levels, such as entry-level, mid-level, and expert. Then, seek talent accordingly, balancing hourly and project-based work as needed.

5. Misc.

Businesses waste money all the time on little things, like printing materials for events only to throw out stacks of unused items. Or worse, constantly purchasing new things under the guise of “keeping up” – when what you already have is perfectly fine. 

Take a good look at what you’re throwing out, what you’re ordering again and again, and ask if it’s truly necessary.

Make it a habit to track supplies, event materials, and other resources used monthly. Identify items often overstocked or underutilized, and set a more precise ordering plan to reduce waste.

Cost cutting is about running a leaner, smarter business. Bt auditing these things above, you’ll have more resources left to actually grow your business – rather than keeping up with unnecessary expenses. 

Now, if only you could convince the team to skip those daily $5 lattes...