If you want to know how to cost reduction process in a company. In this article we present you with some practical ideas that will help you with this task.

The cost reduction process for a company is a real headache. When a company faces a situation where expenses are greater than income, generally, the first thing to think about is trying to increase income; almost nobody thinks about reducing the expenses that the company incurs.

After other articles such as the DGT environmental labels. The electrical prototypes presented at the Geneva International Motor Show, or knowing what the collaborative economy is. Today we radically change the subject. Go for it.

Why need to cost reduction process for your company?


It is not about making cuts without more, but being able to do more things while spending less . You have to optimize costs by reviewing all the company’s processes. Such as energy, logistics, stock management, purchasing processes, taxation, treasury, etc. Now is the ideal time to adjust the company and start growing.

In fact, when talking about this aspect, the first thing that comes to mind for many people is workforce reductions. However, it must be borne in mind that less personnel can jeopardize the quality of the product and the image of the company. Therefore, there are other ways to cost reduction process that we will show below.

How to reduce costs in a company?

For the company to keep its balance green, costs must be intelligently reduced. Along the following lines, we will give you a series of tips for this.

1. Do an audit

To determine the expense generated by the company, the first thing that is recommended is to carry out an audit in which each job position, its functions, or work schedule, among other aspects, are thoroughly studied. It is recommended that this audit be carried out by a human resources consultant with a recognized track record and experience.

By having complete and adequate information, it is possible to generate a plan for the best management of human resources. Thus, the necessary measures may be applied to control and reduce expenses associated with this core part of the company’s activity.

2. Train staff


Training should never be understood as an expense but as an investment. And it is that more trained staff will be more productive in the medium and long term and, therefore, save costs for the company.

When they are continuously trained, workers learn new administrative techniques, use of software and technologies, resource management, and even prepare them to fill different functions. All this results in the improvement of quality and customer service and allows replacing low-paid personnel without increasing expenses.

3. Set target payments

Another way to cost reduction process is by motivating staff through objectives that must be measurable and understood as possible. Thus, they will strive to obtain them, the income will be higher and, if there is someone who does not have the necessary skills for the position, it will not be an extra cost for the company.

4. Control the work schedule


The issue of overtime is more important than it seems when it comes to saving costs, since avoiding and controlling them, using appropriate tools, allows optimizing the performance of the company and managing the registration and time control of workers in time real. With the support of metrics, human resources can be automated and planned, guarantee the reduction of the costs of control tasks, and ensure profitability.

5. Take advantage of social networks

With the use of social networks – essential to make yourself known -, in addition to customer loyalty. A series of activities or services that would entail a cost for the company can be supplied. Depending on the service we want to offer, we can use one social network or another:

Customer service: Companies can enable customer service through Twitter, Facebook, or consultation forums to save time when solving incidents.

Market research: Through any social network, small opinion polls can be created to find out the opinion of consumers on the products offered or on future products.

Selection of personnel: Social networks can be very useful for making personnel selections without the need for intermediaries, with the possibility of publishing offers and accessing the CVs of applicants.

6. Computerize management

The implementation of computer programs can also help save costs. Currently, there are many computer solutions that reduce design, calculation, or administration times, among others, and allow errors to be prevented by increasing quality, speed of responses, and maintaining comprehensive control of the business.

You can save on unnecessary travel and optimize time, meeting virtually via video conference, for example. Likewise, the use of the telephone through the internet (via Wi-Fi) allows savings in the cost of calls compared to traditional telephony.

7. Reduction of financial expenses

If you want to reduce costs, it is essential to reduce financial expenses. Since small and medium-sized companies generally do not have bargaining power with banks – and those that do so under conditions that in many cases are unaffordable and end up causing the “death” of the company – the help of a professional adviser It may be key.

An efficient way to reduce expenses is through business renting. A service that has become indispensable for more and more companies and freelancers who choose it to have new vehicles with fixed and very affordable fees or car sharing, a new system car rental for a limited time (hours, days, weeks, months …). Where you can enjoy the advantages of having a car without being our property.

8. Manage payments and collections carefully


Generally, the most frequent errors of payment and collection are the discounts not applied in complex contracts and purchasing processes, the income not made due to an error in the application of the purchase conditions, and the incidences in the financial flows due to incorrect accounting of invoices. , Credit notes…

It is vital to have the details of the cash flows, to have an adequate collection and payment policy, to check the accounts receivable, and the accounts payable well. Being careful in this sense saves unnecessary bank costs that cause guarantees, defaults, management expenses, etc.

9. Automate processes

To reduce costs, it is essential to have new tools that allow processes to be carried out automatically that were previously done manually, which improves efficiency and reduces the risk of errors that could cost money.

10. Create awareness of savings

One of the keys to reducing company costs is promoting the corporate culture of savings with the awareness of workers. In addition to training and detecting opportunities to reduce costs. In fact, good control of expenses also implies good energy consumption.


Employees should be motivated to turn off their equipment and lights when not in use. As well as reduce document printing costs by driving digitization, using recycled paper, and promoting only the necessary printing.

In short, these are just some measures that can help cost reduction process in a company. But we are sure that there are also more ways to do this depending on the knowledge of the company itself. You have to analyze the activity of the company and see what things may be unnecessary or can be modified to obtain a more efficient result.


I hope this article helps you to sate the cost reduction process for your company. If you follow the rules and take action for your finance department. You easily control your unnecessary cost in your company. If you like this article, please share it with your business partner or your finance department.

Have a nice day!!

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