Inefficiency in business costs. A lot. It costs money, time, quality and morale. It is estimated that every UK business could take on a new full-time employee and pay them above the national average annual salary with the £28,000 that inefficiency currently costs them each year. The cause – employees wasting three or more hours every day working with inefficient business systems.
Over the years Approved Accounting has worked with many clients, not only providing tax and accountancy advice but also business advice on ways to improve efficiency, productivity and, in turn, profitability. Our experience has taught us that there are four essentials to improving efficiency.
The four essentials to business efficiency
1. Get to grips with time management – hours upon hours are wasted due to inefficient work schedules. Time spent at work needs to be focused, as much as possible, on income-generating activity or activity that supports income generation. That means knowing what needs to be done and by when and improving communication, perhaps by banning internal emails in favour of face-to-face conversations or short, maybe even standing, meetings.
2. Outsource non-core activities – focus on what is at the core of your business, the service you provide or the products you produce. Everything else is non-core and could be better and more efficiently performed by outsourced providers who are experts in their fields. Non-core activities include IT and communications, marketing, human resources management, accounting, warehousing and distribution. Find suppliers who will work in partnership with you, because they understand that your success is their success.
“My time is free to focus my energy on building our company,” says Lala Day of Inner Geek Education Ltd.
3. Use technology and automate at every possible point – technology automates and speeds up workflow wherever it is applied, if the right system is chosen and people know how to use it to its full potential. Customer Relationship Management (CRM) systems drive efficiency in your sales and marketing. Mobile technology and cloud computing allow your employees and you to work efficiently whenever and wherever they are by being able to access the information they need to do their jobs. Meanwhile, software and Apps automate processes in many departments, especially in finance and accounts. Xero, FreeAgent, QuickBooks and Kashflow online accounting systems all make getting your accounts in order easier and crucially provide the real-time data needed to make key business decisions. There is also a multitude of Apps to simplify everything from private mileage, expenses claims, inventory and quoting, and much more.
“Advising us to use Xero has had such an impact on how we can keep totally up-to-date with all financial transactions. This has not only been hugely time-saving but has also meant that we know where we are at all times,” says S Roberts Upholsterers.
4. Prescribe processes and procedures wherever possible – time spent waiting, whether for a process to finish or to be told what to do next, is also time lost. Create policies (rules or the framework) for every function and task within the business. Then map out the process involved to get from A to B or A to Z. Next create the procedure, a list of exact instructions for every step in that process. And create templates for all standard documentation required so that time is not wasted reinventing the wheel.
“It is good to work with an accountant who suggests modern working practices…allowing us to concentrate on the day-to-day needs of our office,” says Carl Shears of Airports Direct Ltd.
Work smarter not harder
No matter how hard you might try it is impossible to squeeze more hours out of your day. The trick, therefore, is to make every hour you do have available as productive as possible. Put into action the points made above and you will soon be seeing the efficiency gains on your bottom line.
If you need our expert advice on improving efficiency in your business email Jon now.