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Reduce Costs

If you’re asking ….:

Are my overheads too high? How can I reduce my financing costs? Should I make this component or buy it? Could I reduce overall costs by investing in this new machine? Am I paying too much tax?

then Alpha-Financials’ independent, in-depth experience of performance improvement, investment appraisal, cost analysis, finance raising and tax knowledge will help you answer such questions.

How to analyse your costs

Obviously a very broad topic, it initially makes sense to break your costs down into the most important categories which can then be examined separately, since these will all have different characteristics and drivers.

Identification of the key financial ratios (eg gross margins, debtor days etc) – their movements over time andversus industry norms– will open up opportunities for targeting improvement.

Alpha Financials is highly experienced in undertaking these analyses, implementing improvements and enhancing financial performance.

You’ve come to the right place to find the people who really want to work with you.

How to find cost saving opportunities?

You know your business best, so possibly you know where costs can be saved but are uncertain how to go about it.

If you’re not sure where to start, then our subsidized Financial MOT will quickly look at all areas of your business to identify where savings or improvements can be made.

Alternatively, if you want independent expertise to regularly analyse your financial performance and suggest improvements, then teaming up with a part-time Finance Director could suit your needs. It’s much more affordable than you may think.

Cost Types

Direct, overheads

Financing

Interest and dividends

Taxation

Opex, Capex

Searching for reductions in cost will focus on the three main groups of

a) Cost types (covering operating costs and capital expenditure,
b) Taxation and
c) Financing Costs.

Option 1 - Cost Types

Direct or variable costs determine your gross margins and these can be compared with industry norms to determine competitiveness.

Investing in long term assets can prove tricky and often centres around working out whether paying something now to save more later makes sense.

Overheads need scrutiny on an item by item basis to determine if they’re absolutely necessary and if so, that they’re being sourced in the most cost effective manner.

Option 2 - Taxation

Many opportunities exist for reducing tax, with SMEs often failing to claim perfectly legal tax incentives set up by HMRC. For more detail on these, see our tax advice.

Option 3 - Financing

The two basic forms of financing are debt and equity. For many SMEs, equity (supported perhaps by grants) is the only viable start-up funding option.

Debt however comes in many different guises and usually places restrictions on how the business operates.  It’s important to be able to properly compare the different forms of debt on a like-for-like basis to determine which form is best from both cost and risk viewpoints.

Understanding and managing your future cashflows is the key to determining how much debt you really need and minimising it, which in turn will reduce your interest costs

£15k

Average cost savings pa

£17k

Average one-off cost savings

5 times

Client benefit/cost ratio

Case Studies

Get in touch

A specific problem, a desire to reduce accounting costs or you just want some general financial advice from qualified experts? Then call us NOW

Case Studies

Case Study 01

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Case Study 02

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Case Study 03

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If you have any questions please get in touch using the contact details below, or using the form and we’ll get in touch with you as soon as possible.