How To Manage Costs in a Growing Business

How To Manage Costs in a Growing Business

Experiencing growth in your business is exciting, but managing costs can be daunting. Keeping accurate records and using digital tools can help you to manage costs and create sustainable growth for your business.

Growth is the ultimate goal for most business owners, such as accountants with their own practices. It is the dream they have on the first day of their company’s existence — that it will grow and bring in profits and new opportunities. But what happens when your company actually begins to grow? How do you handle the changes that come with this growth? 

As a company grows, its needs begin to shift. Everything from your workforce to budgeting has to change to accommodate the growth the company is experiencing. All of this change can be costly, so it is important to plan ahead and understand how you will manage the expenses associated with your company’s growth. 

By using digital tools and keeping accurate records, you can manage the costs of your growing business and set yourself up for sustainable growth. 

Planning ahead for business scaling

As you build your business, it is important to develop a business plan that accounts for growth. Your plan should include actionable steps for sustainable expansion. 

It is impossible to predict with one-hundred-percent accuracy what kind of growth your business will experience. With this in mind, it is important to have a flexible plan that is able to be modified as needed, since growth can potentially be smaller or greater than projected. 

Your company’s growth will likely involve a variety of different people inside and outside of your company, such as managers, suppliers and contractors. Using software to keep track of these plans can be a useful way to make sure all necessary parties are on the same page, have access to vital information and are able to collaborate via the cloud. Helpful digital tools can ensure your finances match up with the growing needs of the company. 

Projected costs

When you are managing your company’s growth, it is important to keep detailed expense reports and projections. Keeping these reports and regularly studying them will ensure excess spending doesn’t occur without your knowledge. This can help you to avoid unnecessary expenditures that can get lost in a period of quick growth. 

Examining personnel structure

As your practice grows, you may be worried about the cost of hiring additional staff. However, hiring isn’t always necessary. You should start by examining your current workforce for the future and identifying areas of redundancy or tasks that can be automated. 

Identifying these areas can help you to enact changes that make better use of your current staff. For example, if a quarter of your staff’s work can be automated using various software or AI tools, then that time can now be spent on tasks that are needed due to your company’s growth. 

You can save money by avoiding the costs of onboarding and training new staff. You can also take this chance to invest in your current staff by providing training and further education opportunities. 

Staying flexible 

If you are suddenly seeing a rise in growth and profits, you may be tempted to make investments. However, it is not often a good idea to make significant investments after a brief period of increased financial success. The market can fluctuate greatly and the growth you are seeing now may not be present in the long term. 

If you are interested in making significant investments, it is better to keep them more flexible until your company’s growth stabilizes and you are in a place where you can make more long-term plans. 

In fact, flexibility has been deemed the most important business tool to have as of 2022. Staying flexible will allow you to connect with customers of all types and weather the changes that may come to your business. 

Finding opportunities to streamline operations with technology

One way to compensate for the growing needs of your company is through the use of technology. There are countless tools you can use to automate and streamline operations within your company.

Using these tools can prevent your employees from spending hours completing repetitive and tedious tasks. It will also allow you to make the most of your existing workforce and resources and grow without hiring additional staff. 

There are many types of software that can help accounting firms and audit departments streamline operations, including:

  • Cloud-based accounting software: This software allows all involved parties to have real-time access to vital financial information for your company. This can help your leadership team to stay on top of expenditures and control costs. 
  • Data entry automation software: Manual data entry comes with a variety of problems. Automating data entry can save you money and time. This software takes tasks away from your current workforce and allows you to make the most of the talents and abilities of your staff. 
  • Working papers software: This software provides intelligent reporting and real-time collaboration that allows you to manage costs as your business grows. 

These tools can assist in automating accounting practices within your business and can help you stay on top of your company’s expenditures as you grow. 

The importance of cost control

During a period of growth, it can be helpful to reduce business expenses as much as possible. If you aren’t careful, some expenses may grow faster than your budget can handle. You may be tempted to take big financial leaps during a period of high growth, but it is important to keep detailed records and focus on cost control. 

Controlling your finances by finding areas to reduce spending can help keep your firm from growing too quickly to be sustainable. Reducing spending can come from automating certain practices, moving your workforce to be remote, and monitoring your spending to reduce unnecessary and redundant costs. 

Growing your business is an exciting time for any accounting leader. By using digital tools, monitoring your spending and staying flexible in your investments, you can make the most of this period of success and create sustainable growth for years to come.