Six Ways to Keep Operating Costs Under Control
Trying to reduce operating costs is a challenge for any business owner. What can you cut that won’t put you at risk of damaging the morale of your team, the quality of your products or services, or the effectiveness of your core business operations?
It may be hard, but it’s important to keep a close watch on operating expenses and know where and how to identify opportunities for savings. Here are six best practices for keeping things lean and effective.
1. Be Realistic About What You Can Control
Start with a realistic outlook. Some expenses, like rent, utilities and material costs, are likely not within your control. The use of margin analysis, targets, and financial KPIs can identify the areas of your cost structure that can improved — and which require a different strategic approach. With clear financial visibility, you can make smart, targeted decisions instead of spreading your effort thinly across uncontrollable factors.
2. Rethink How You Manage Labor Costs
Labor is often a business’s largest overhead expense. Don’t assume you have to fill every role with a full-time employee. In some cases, outsourcing, including accounting and outsourced controller services, can be a better path for growth or profitability. When you evaluate your staffing model through a financial lens, you can align labor decisions with revenue targets, margin goals, and scalability needs. Whether it’s exploring outsourcing, right-sizing teams, or redesigning roles, financial modeling can show you the real bottom-line impact before you make the move.
3. Be Strategic about Your Technology Use
Technology should streamline your operations and reduce manual effort — not create new headaches. However, choosing the wrong software (or failing to optimize the right one) can quickly eat into your bottom line. Find a partner who can help you implement and optimize systems that drive better financial reporting, real-time visibility, and operational efficiency.
4. Price Your Services and Products with Profitability in Mind
Trying to negotiate lower prices with vendors can help, but focusing too much on vendors often misses the bigger opportunity: Are you pricing your services and products in a way that truly supports your business’s financial health? A data-based pricing strategy and financial modeling can reveal the impact of pricing changes on cash flow, margin, and long-term growth — helping you price not just competitively, but strategically.
5. Keep a Close Eye on Expenses
It’s easy for costs to spiral — especially discretionary expenses like meals, travel, entertainment, and office supplies. A “set it and forget it” approach leaves money on the table and exposes you to risk as business conditions change. A disciplined month-end close process will ensure that your financials are accurate, timely, and actionable. Financial dashboards and KPI reporting can help you monitor expenses in real time — not just once a year. A structured approach will flag inefficiencies early, align spending with strategic priorities, and give you the confidence to make informed financial decisions month after month.
6. Find an Accounting Partner with a Growth-Minded Approach
Outsourced accounting, financial and business advisory services aren’t just about saving time or money — they’re about gaining the right financial insights to make better business decisions. A true partner doesn’t just report what happened last month; they help you shape what happens next. When you find a team who understands how your financials connect to your goals, you can use them as a roadmap for growth.
