Financial Guide for SMEs - SME Corporation Malaysia

Financial Guide for SMEsExpense ManagementGood management of general expenses by thebusiness will contribute to increasing profits. Bymonitoring business expenses, you may be able toidentify where costs are increasing and take action toensure that you maintain your net profi t margin.When monitoring expenses, do not forget to identifythe expenses that are important to your businessoperation (e.g. presentation of premises, marketing,staff training) and keep these at sustainable levels.HINTKeeping a close eyeon your expenseswill ensure that youmaintain theprofi tability of thebusinessTo maintain constant control on expenses, continuous review will help you toidentify where costs are getting out of hand. Do not forget to use the profi tabilitymeasures, as they are the simplest way to quickly identify if your profi ts arebeing eroded. Some other ideas to manage expenses are to consider joiningforces with other businesses to benefi t from group buying, investigate usingcompanies that provide access to discount services for bulk orders, and to seekquotes from different services to ensure that you are paying the best possibleprice for your expenses. Often, if you are a member of an industry association,the association may have established relationship with service providers suchas insurance companies and you may be able to access discounted services orproducts through your membership.However, be careful not to focus too much on individual expenses. Thevalue you may save from such an exercise may be outweighed by the cost ofyour time and the aggravation such a focus may cause your staff, suppliers orcustomers.TIPLook for opportunities to join with other businesses for “group” buyingthat can provide discounts on your expenses45Chapter 2-5 p22-65 Eng.indd 458/15/11 5:01:56 PM