There are more ways to save money at a small firm than ordering bulk toner cartridges. Even minor tweaks to daily processes can increase your firm’s efficiency and, in turn, boost your bottom line.
For Ashton Ferrin, CPA, of Park City, Utah, any expenditure must meet one condition—it has to benefit his clients.
“I opened my own firm last year, and from day one, I’ve been very conscious about necessary expenses,” said Ferrin, a sole proprietor. “My practice is about service to the clients, not me. So my office expenses have been extremely low.”
Ferrin built his own desk at Big Mountain CPA from a $10 recycled door and scrap lumber.
“I’ve found that many of my clients appreciate something a bit unusual and are even more thrilled when I explain to them my philosophy about serving them rather than myself,” Ferrin said.
Upcycled furniture won’t work for every small firm, so here are more tips for lowering expenses.
Prioritize efficiency when buying technology
The best way to cut expenses is to increase efficiency, said Carl Peterson, CPA, vice president–Small Firms at the AICPA. “But sometimes low-cost tools are not very efficient,” he said.
When choosing a tax software package, for example, Peterson believes in a single-platform system. Though purchasing separate pieces of software may be cheaper, it may require you to spend more time toggling between computer windows as you use the different programs, he said.
Peterson made the leap to a single-platform system a few years ago in his previous role as managing partner at Peterson, Peterson & Associates PLC in Minneapolis-St. Paul. Despite the initial expenditure, his year-end profits were higher, he said.
“You’re going to save so much time and process when you use software programs that talk to each other,” Peterson said. “You may spend a little more upfront, but you’re going to save money in the long run.”
Some accountants are wary of giving up printed documents for fear of cybercrime and data loss. Although those concerns are serious, there are solutions that make going paperless feasible. And forgoing dead trees can lead to real savings.
“When I started my practice in 2007, I bought a high-quality scanner for each full-time employee,” said Ketan R. Sheth, CPA, of Long Beach, Calif. Instead of paper, Sheth and his team of two full-time employees use encrypted PDFs that require passwords.
“Not only are we saving on paper and toner, but using fewer filing cabinets in turn requires a smaller office space,” he said. Shrinking your office space can add up to thousands of dollars saved on leases—more than enough to cover the cost of quality scanners and secure cloud storage.
“The days of printing everything and putting it in a fancy folder to hand-deliver to the client are over,” said Ferrin, the CPA with the handmade desk. “It just sits in their drawer, and they ask for an electronic version. I make sure that my electronic communication is as professional as anything hand-delivered, and my clients appreciate it.”
Hire part-time staff
Salaries and benefits, including the rapidly increasing cost of health insurance, are typically the most significant expenditures for small firms. But there are ways to keep costs low, such as adding part-time staffers during busy season.
For Allen Nahrwold, CPA, a sole practitioner in Phoenix, employing only part-time employees has saved him from having to offer benefits such as paid vacation and sick time.
“Our three staff members chose to work part time,” Nahrwold said. “They have latitude in deciding which days and hours they want to work, and they appreciate the flexibility in their schedules, which allows them to accommodate family and other personal obligations.”
When adding part-time employees for busy season, be sure to review each candidate’s background carefully, Peterson advised. These workers need to be experienced enough to catch up with updates to tax laws and turn in quality work. Work performed by less-experienced staff can prove inefficient because it needs so much additional review time, he said.
Renegotiate service contracts
Evaluate all of your business’s services and contracts. If your contract is expiring, or you’re just floating month to month on phone or internet services, ask your provider about ways to save money.
“If you’ve been with your provider for a while, there may be some opportunities to negotiate,” Peterson said. “You could get a price reduction or maybe even an upgrade to your internet speed for the same price.”
Take the same approach with other services, such as your security system contract, janitorial services, and the retail stores where you buy office supplies.
Developing a relationship with your local office supply vendor can put you in a position to negotiate, Peterson said. The savings are typically 25% off retail prices—definitely enough to create noticeable cash at the end of the year.
Share an office space
If you’re a small operation, consider using a leased space with another company. Nahrwold and his three employees share their office with another CPA firm.
“Certain fixed costs for the front office, conference room, and kitchen are reduced when spread among several firms,” he said.
If you are starting out on your own, you could also consider a shared co-working space. In an age of jobs that allow telecommuting, more communities are creating co-working spaces where, for a monthly fee, you can rent a desk or cube at a shared facility, with access to equipment such as printers, scanners, and fax machines. Some co-working spaces offer private offices for those dealing with financial or other sensitive information.
Samiha Khanna is a Durham, N.C.-based freelance writer.