1. Develop a budget for each department.
2. Develop a list of what employees are allowed to purchase.
3. Know how much cash you have in the bank every day.
4. Read and approve each expense.
5. Stay on top of and try to collect as quickly as possible your accounts receivable.
6. Extend your accounts payable.
7. Barter for services and products.
8. Only buy things you absolutely need.
9. Ask every vendor for advice on how to save money on products you purchase from them.
10. Put out a bounty on internal savings by rewarding employees with 10 percent of whatever money they can save the company.

Magazine Subscriptions.
A client of mine once ran a company that had thirty employees and sixty-seven magazine subscriptions. Some people bought the same magazine twice. When she questioned them why they needed duplicate subscriptions, they stared at the floor and said so they wouldn’t have to carry the extra paper in their briefcase. There are so many free subscription magazines available that this is one area you can save a nice amount of money. The company in this example was spending over $5,000 a year in magazine subscriptions, yet they couldn’t afford to buy some much needed software and computers, which would pay for themselves by increasing productivity.

Telephone.
The competition is so fierce that a company can always save money in this area, regardless of usage. One of my clients was paying fifteen cents a minute for long-distance charges from one of the top long-distance companies. He asked his controller to send out for bid their telephone bill. The result was a smaller company gave them a rate of nine cents, which translated into 40 percent savings; in this case the company saved $12,000 over the course of a year.

Mobile Telephone.
This is an area that is widely abused, but usually unintentionally. A prudent client of mine told her employees that the company will only pay for calls to customers and prospects to tell them that they are running late or for some other emergency. As of the writing of this book, all the usage rates are basically the same, so the only way to save money is to instill discipline.

Leasing Companies.
Most companies can’t afford to buy all of the equipment they need to operate, so they lease equipment. Leasing is a very expensive form of financing. Shop around and look closely at three things before signing a lease: the rate of interest you are being charged, how much insurance they want you to carry or buy to protect their investment, and late penalties. Late penalties can sometimes cost as much as the lease itself. One of my clients decided to borrow money from his retirement plan, which he swore he would never do, and bought out the leasing contract he had signed because the interest rate he could pay himself was cheaper.

Insurance.
Every type of insurance policy should be reviewed and put out for quote each year. Insurers who have to pay out a lot of money to cover liabilities end up having to raise everyone’s rates, even those who had no claim. Therefore, putting your insurance out for bid each year can guarantee the company paying the lowest premiums. If your company files none or just a few claims, another insurer will be glad to add your company to their pool and lower your premiums for lowering their risk.

Service Contracts.
Service contracts usually aren’t worth the money with the exception of copier service contracts. All of my client’s experiences are that photocopiers breakdown often, and the service charges are usually exorbitant.

Memberships.
Only keep memberships in organizations that have the potential to bring you business. Also, the only people who should be members initially are company salespeople. Watch out for duplicate organizational memberships and make sure someone is responsible for being the liaison between the company and the organization. Many of my clients who were in financial trouble called organizations they wanted to join and asked them for reduced rates or requested to pay on a monthly basis. My clients told me it was rare they were refused this request.

Advertising.
Unless the company is in retail, minimize or eliminate advertising. A client of mine who ran a large retail mall decided to eliminate advertising; the percentage of shoppers dropped by half within two weeks. One client of mine employed a simple advertising tracking system. He used the same coupon in each publication in which he advertised, but put a number in the corner of the ad to indicate which publication the ad came from. Once these coupons came back, my client was able to know which publications provided the best responses and was able to eliminate advertising in those publications whose responses were low or nonexistent.

Charity.
Companies can be overwhelmed with solicitations from worthwhile causes. Unfortunately, management has to restrain itself and eliminate all but those important to one or two big clients. In a turnaround situation, even charity has to have a return on investment.

Business Supplies.
Buy only what is needed and try to purchase things on sale. Have one person responsible for the supply closet; any person who wants a supply item must sign for it. This will give you valuable information on usage and who is using certain items. One of my clients found that one person was using a lot of expensive computer disks. Their manager said they had to backup a project that required a lot of memory, and they could save the company a lot of money by erasing old disks used for former clients. My client asked why they weren’t doing this already, and the manager said it was just a past policy of the former president to save everything. This requires a judgment call, but most times its best to reuse what you have unless you need to keep information for legal and/or contractual reasons.

Computers.
Depending on the type of business you are in, you might not need a state-of-the-art computer system. Try upgrading what you have and make sure all equipment is being used to its fullest capabilities. One client’s employees were so attuned to the company’s financial situation that they started swapping parts out of old computers and reusing them. This saved the company a lot of money.

Travel.
There are certain rules of travel people should follow. Never fly first class, unless the employee wants to pay the difference or has frequent flyer miles to cover the cost. If there are two airports within an hour to and hour and a half drive time, check which one offers the best rate. Flying to San Francisco from Philadelphia is 50 to 80 percent higher than flying out of Baltimore.

When attending a convention, always ask for the corporate rate at the hotel; never stay at the hotel booked by the convention. Usually hotels nearby a convention offer rates 20 to 50 percent below what a guest would have to pay for the convenience of staying in the convention’s hotel. When visiting a Fortune 500 client, ask them for the hotel they use and if you can use their corporate rate. The savings can be significant.

When a company is in crisis mode, management needs to have every line item that represents $1,000 or more on a spreadsheet so managers can see where all of the company’s money is going. Below is a sample of how to review expenses