more-arw search

Q&A Forum

Are there unnecessary costs and significant profit leaks within your business spending?

Now that revenues are increasing and many businesses are on more solid financial footing, are we taking our eye off of expense management? Curious what your thoughts are since it seems that the pendulum has swung from revenue growth in 2008 as a top priority to a "lean and mean" focus (from 2009 to 2013) where expense reduction and increased productivity were the daily mantra and now back to revenue growth as the everyday drum beat - during the last 16 months or so. Isn't it possible to have a balanced approach where both objectives co-exist?

Answers

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

The focus should never be on revenues. The focus should always be on profits. Maximizing profits requires costs controls. Focusing on revenues only may lead you to incorrect conclusions. It is not uncommon that the high volume business which registers large revenues is not the most profitable business.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Balance of cost controls should be the watchword. In our recession, too many costs were squeezed just a little to tightly. So, with increasing revenues, a easement of some of those controls might be in order.

But not, as Regis said, taking your eye off the ball.

Patricia Oudille
Title: Credit, cash & treasurer manager
Company: ALCATEL LUCENT ENTERPRISE
(Credit, cash & treasurer manager, ALCATEL LUCENT ENTERPRISE) |

Sorry, I'm french (and probably my company did'nt spend enough on English training ;-) . I agree, the 'balanced approach' is not common practice, all the contrary. Very often, when profits are back, costs controls often falls by the wayside, which is a great mistake. Acting proactively and in an sustainable manner, especially when profit is back, should be the 'watchword' as mentioned by Wayne. By doing that way, pressing drastic decisions, up to and including dismissals, due to the high urgency that a sharp decline of costs requires, could be avoided. Don't you think that along with revenue and profit, a third business driver, such as cash flow, should be take into consideration to make this change ?

1509 views
Topics

Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email content@proformative.com to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.