Czech companies' costs are rising. But they can save even without cuts

Due to high inflation and the energy crisis, companies are looking for ways to quickly reduce costs. Cutbacks may be effective in the short term, but they limit the company's development in the future and potentially deepen the economic crisis. A painless option for reducing costs is, for example, streamlining outdated processes or purchasing digital technologies.

1. Streamlining existing processes

The first step in reducing costs for companies should always be to review existing processes. Go through all regular company activities and focus on those that take up the most time . Typically, these are order fulfillment, document processing, or processes within the warehouse or customer service.

For each activity, map out with your employees the options for how it could be done faster and what you need to do it . For example, after a short research, you will find that instead of physically approving invoices, where the invoicer goes around to managers for signatures, you can implement an approval tool that solves everything electronically, and you will save dozens of hours of time per month. Plus, invoices will be approved faster and cash flow will improve.

2. Investment in technology and digitalization

According to our research, 60% of Czech companies start digitization by digitizing the purchasing process . This means that they send all business documents electronically and even automate some activities (for example, receiving invoices).

In practice, for example, companies are implementing EDI - electronic document interchange. This is a technology that allows companies to send documents (typically orders and invoices) in a special format that allows for the automation of some downstream processes.

For example, when a company receives an invoice, it is automatically compared with the original order and performance, and if everything is in order, it is automatically approved and possibly posted. The accounting department does not have to rewrite anything and in addition to time, the company saves a lot of paper . Faster exchange of documents will also improve cash flow.

Although it may seem like a small detail, for companies with a large volume of documents the savings are huge. For example, MALL saved over 4 million CZK per year thanks to this technology.

3. Negotiating better terms with suppliers

Next, start looking for ways to save money on your purchases of goods and services from suppliers. Don't try to persuade them to lower prices at all costs. Your suppliers are probably also watching their money, and the potential loss of a supplier could hurt you even more.

You can reduce these costs, for example, by buying in larger quantities, so you can take advantage of volume discounts and save on shipping costs. In general, also work to reduce urgent purchases of goods, as they will cost you more. You can also negotiate a better price with the supplier by concluding longer contracts.

4. Permanent remote work

The pandemic has taught companies that remote work is not only possible, but in many cases beneficial. If you have successfully tested remote work with your employees in recent years, consider reintroducing it.

If you offer your employees permanent work from home, you will save money on office space, equipment, and energy. Even if only a third of your employees accept the offer, you will still save some of the costs of running your office . For example, Komerční banka on Wenceslas Square offered part of its space to other companies for rent after employees moved to home offices.

The entire article was published on the website aktualne.cz .

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