60 Cost Cutting Tips (give or take a few) in 60 Minutes

Cost Cutting Tips
The purpose of this presentation is to provide you with cost cutting tips (and a
few revenue generating ideas) that can be implemented TODAY without jeopardizing the integrity of the programs and services you provide to your staff, members and the general public.

CASH IS KING!
• Consider leasing versus buying your office equipment
• Change payment cycle to twice/month or every two weeks.
• Stretch payments terms, pay no earlier than 30 days out (unless you can save on payment discounts)

Cash Management Tips
• Adjust investment strategy to allow for more interest income in the short term.
• Look at converting to a Defined Contribution Pension Plan.
• Develop cash flow budgets and invest unused cash.
• Refinance any outstanding loans.

Outsourcing
• Consider outsourcing non-core functions (accounting, information technology
support, printing/mailing, etc).

Un-Fix Fixed Costs
• Don’t be afraid to ask existing vendors for help.
– Possibly renegotiate contracts.
– Cut down on hours/usage.

Use the Web
• Consider using the web for booking airline and rail tickets.
– Centralize travel booking for volume discounts when possible.
• Move printed materials to your website (e.g. Annual Report, newsletters, member communications, meeting brochures).
• Take online/EFT payments from members.

Zero-Based Budgeting
• Require all program managers/ department heads to justify every line annually.

Program-Based Reporting
• Allocate all costs (direct expenses, personnel and overhead) to each major program area.
• Pull the plug on non-performing programs.
• Revisit budget assumptions quarterly to determine if upcoming projects are still necessary or if they can be postponed.

E-learning, anyone?
• Utilize e-learning or CD-ROM based learning for staff.

Lower your service fees
• Renegotiate your credit card discount fee at least annually as credit card volume increases.

Find Low-Cost “Expert” Trainers
• Setup brown bag lunches to train staff on Excel, Word, PowerPoint, Outlook and your Association Management System.
• Ask existing vendors if they would be willing to offer free staff training.

E-mail it!
• Consider personalized e-mail marketing vs. costly snail mail and fax services.

Telecommuting
• Consider telecommuting to offset the need for additional office space.
• May open the door for office/cubicle sharing to save space.
• Consider subletting excess space.

Bring in a telecom broker
• Analyze all telecom costs (local, long distance, internet & conference calling).
• Ensure the broker’s commission is paid by the telecom provider, not you!

Use other broker services as well
• You can normally get a better deal on health, disability, life, property and casualty and D&O through a broker.

Look at purchasing processes
• Look to other associations and corporate credit cards for discounts on office supplies, equipment, delivery services, etc.
• Delay capital purchases.

Establish Clear Policies and Procedures
• Require multiple bids on all products/ services above a certain threshold.
• The threshold may be a specific dollar amount or the term of the agreement.
• All check requests/expense reports should be authorized.
• Test internal controls for evidence of fraud.

Keep a Close Eye on Supplies
• Ensure that someone in the office is monitoring office supplies on a weekly basis.
• Prepare inventory sheets of essential items.• Charge programs/departments for supplies used as a direct expense for their area.
• Consider a purchase order system.

Get a better rate for your space
• If you lease your office space and plan to be there long term, consider renegotiating
your lease well before the expiration date to lock in a better rate.

Evaluate Courier Services
• Closely track Fedex, UPS, Airborne and local courier usage.
• Consolidate carriers for volume discounts or use Priority Mail for non-essential items.

Bank Account Analysis
• Meet with your banker to review your monthly account analysis statement for potential cost savings.
• Consider lockbox services – cash to bank sooner!

Keep staff productive on the road
• Have traveling staff share a laptop.
• Setup Virtual Private Network (VPN) access for remote/traveling staff.
• Reduce calling card fees by setting up an 800 # for staff use only.

How are receivables performing?
• Calculate the average age of receivables outstanding over the last two years. Where is the trend line heading?
• Change your policy to require prepayment for all product purchases and meeting registrations.

Audio/Web Conferencing
• Consider audio/web conferencing versus in-person workshops.
• Archive for later use (sales to members).
• Use for committee/task force meetings.

Allow staff to share the cost savings
• Develop a program where staff receive a percentage of the cost savings.
• Set clear guidelines and consider excluding senior management.

Centralize the hiring of temporary employees
• Have all hiring run through one staff person. He/She may be able to negotiate lower rates based on volume.
• Better yet, ask employees if they know of individuals that may want to work part-time or intern for a specified period of time. Save on the inflated temp fees altogether…

Evaluate All Staff Positions
• When a staff person leaves, evaluate whether the position is still needed, or whether it can be filled by a part-time person or outsourced completely.
• Conduct an internal business process review and streamline operations.

Save on costly A/V equipment
• Partner with an A/V company to supply all your A/V needs in exchange for exhibit space and/or sponsorship recognition.

Print “locally” at meetings
• Partner with a local printer for meeting handouts and other printing needs.
• Also have materials which are printed specifically for the meeting sent directly to the meeting hotel versus being shipped to your office AND THEN shipped again to the meeting hotel.
• Better yet, transfer all meeting handouts to CDROM and find a sponsor.

Get integrated!
• Move towards integrating your website with your AMS system.
• Begin guiding your members to your website for member updates, meeting registrations, product orders, etc. in preparation for the integration.

Get staff involved!
• Make cost savings everyone’s business!
• At least annually, review the association’s financials with the entire staff.
• Convince them why they should care!

Source : Finance & Administration Roundtable - June 25, 2003 -Panelists: Tim Abercrombie, CPA Chief Financial OfficerI NDEPENDENT SECTOR -• Chris Busky, CAEVP, Business & Operations Equipment Leasing Association -• Jay Sciuto, CPA Audit Manager Tate & Tryon CPAs

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