Adding Value

Published by Financial Aid Consulting on Friday, 13th July 2018 - 12:00PM in Contribute To Your Success

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How You Should Save Money and Contribute to Your Company’s Well Being

by Howard Freedman

Copyright 2019 Financial Aid Consulting. All rights reserved. No portion of this article may be reproduced mechanically, electronically, by photocopying or by any other means without expressed written permission of the author.

Saving money in any organization should not be an option but a way of life. This is especially true during these volatile economic times when organizations large and small struggle to exist. Regardless of the size of your organization, there are ways that you can start your savings spree right now.

Qualifying Savings

Before adventuring into cutting costs be certain that any change does not impact productivity, long-term profitability or create negative exposure to the company. For example, if you are planning a business trip it is always wise to book ahead to get the best and most direct flight that allows you to be refreshed when you arrive. However, if you book the cheapest flight requiring several stopovers and hotels in out of the way places, you will not be a happy camper when you arrive. This is the time to ask yourself if this trip was worth it, especially if you are too tired to benefit from what you could learn. The answer may be that you would be better off to work at the office, have someone close to the meeting location attend in your absence and share what they learned. Despite your desire to get out of the office, the company would not have gotten their money’s worth if you weren’t relaxed. Other ways to accomplish positive results could be using teleconferencing, training the trainer to share with others, carpooling, sharing rooms. The answers will vary but you can save your company money if you find alternatives that can offer the same or better results at a lower cost.

Saving money does not have to cost money or valuable time if you start small by taking what I call the FIN approach. That stands for Fix It Now savings that are easy to implement. Here are some of my favorites.

• Reduce mailing costs by using internal distributions within the company rather than to an employee’s home. This can apply to W-2s for active employees, payroll and expense checks and direct deposits, company mailings and by reducing the number of other distributions from monthly to quarterly or annually. The paycheck stub is also another way of getting the message across.

• Work Shifts-If you find that there is more pressure to get the production work out during the day, hire a second shift that can do the production work to increase productivity leaving the day shift time to service employees. Although you may wonder why hiring part-timers will save money, think about saving the costs of benefits, reducing overtime and improving quality since there are fewer distractions at night.

• Manual Checks-Though they are sometimes necessary because of compliance issues, can be avoidable by maintaining relevant statistics that identify the reasons and sources of manual checks. You can then identify the worst offenders and support your case for reducing the number of checks issued. The next step is to establish the rules and costs of manual checks that could have been avoided. Be sure to include those errors that occurred within your department to be sure that they do not reoccur. Charge each department a fee to cover the real costs of a manual check that will hit their budget and their individual job performance. Moreover, look at this information as a way to train and retrain employees about how they can lower their costs if they comply with deadlines and procedures.

• Reduce Reports and Paper- So many reports produced on paper are obsolete. Beyond the handling, they usually end up in a pile or feed the shredder. The simplest solution is to attach a short survey to each report to find out if the report is used, how is it used or if there is other information available online. Some departments may also have access to this information an formulate create their own reports. Other information could also be reported by exception.

• Avoidable Losses and Internal Controls-Internal controls and auditing of data have never been more critical because of technology. Though many of the manual tasks have been replaced by computers and related technologies-you need to take a step back to review your internal control procedures. That means segregation of duties, approval authority, establishing check limits, encouraging employees to take their vacation and tight control of manual checks should be mandatory. Beyond expense control, carefully review all withholdings that do no impact departmental expenses but can inflate net pay. One example that came to mind is a former, employee who submitted receipts for employee purchases that were added to his net pay and charged to a corporate department. Until we ran a report showing discounts by the employee did we realize the fraud and grounds for termination?

The Second Group of Saving

The second group of cost savers I call TTTs. That stands for They Take Time. These are the ones that will save money yet cost money. They take time to justify a review and sell to management. The good news is that technology has made these opportunities more readily available without the need for more customization.

• Using Time and Attendance systems normally has a rapid payback when you know that timekeeping rules and controls to measure both productivity and compensation eliminates many costly errors. The biggest advantage is that problems are identified when they occur and not at the end of the week. Such things as early in and out punches, unauthorized overtime, and attendance tracking are proactive ways of controlling costs.

• Outsourcing is another way of saving money if it is used correctly. Sometimes outsourcing can be more expensive in terms of recurring costs but also yield other benefits by reducing risk and unnecessary penalties. Services such as tax filing, unemployment management, and even payroll processing may impact staffing levels but allow you to analyze and control the information rather than worrying about how to produce it. Selecting a company takes the same type of diligence as selecting a new system. You are building a business relationship with shared responsibilities that should not be conceived as a threat but a resource that can give you the time to work on more urgent issues.

• Decentralization-It makes little sense to have a remote site send you their paperwork to have you enter in the system. This does not add value but further complexity into a process. With decentralization, you should not seek more paperwork but better controls to ensure that accuracy and timeliness of your data. Certain responsibilities can be handled much better at the source than in a central office. Beyond processing payroll, you are a detective, analyst, and an opportunist when it comes to areas for improvement.

Tools

• Maintain spreadsheets and the following tools

• Flowchart processes from start to finish. One good place is to flowchart the steps for paying an employee, approvals, and distributions.

• Cause and Effect Charts –Identify your biggest areas of concern and identify what causes the problem and possible solutions.

• Service Center Logs the source, subject and resolution of each phone call. This provides a tool for publishing common questions and answers to employee questions and training tool.

• Take this data and create graphs to identify trends

• Create surveys to get ongoing feedback about services and recommendations for improvement

Involvement

• Saving money cannot be done by one person. It is an attitude and part of a culture that should encourage positive change that can make good things better. Feedback is critical especially from other departments and from those who do the hands-on work. It should be construed as an uplifting opportunity to gain recognition for the home run ITT savings or just everyday FINs. Be positive and realize that you will have different challenges, yet you know that you are a trouper and will get the job done.

• The other valuable sources are your networks and other relationships that are willing to share ideas and insights that can be mutually beneficial. I am grateful for many of relationships that have helped me to make better and more objective decisions 

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