Search Your Company For Extra Cash

Does the supervisor of your mail room understand how that department makes money for the company? Does your administrative staff know how to increase the company's bottom line?

It's easy for employees to begin to view their jobs narrowly and forget that they may be able to contribute to the economic health of the business.

Ask your staff, including managers and supervisors, to compile a checklist of ways that each department can meet — and exceed — the company's profit projections. If they know what to look for, your employees will come up with dozens of suggestions. After all, they are in the best position to recognize waste and suggest ways to economize or make better use of resources.

Example: One large company used hundreds of window envelopes every payday to deliver paychecks to employees by interoffice mail. Since there was no writing on the envelopes and they were never sealed, the envelopes were still in perfect condition, yet employees simply discarded them after removing their paychecks.

The payroll clerk suggested putting a bin in each department where the envelopes could be collected and used again the next payday. It was a simple step but it cut down on the cost of supplies, and allowed conservation-minded employees a way to feel good about saving paper. Of course, the company could also switch to direct deposit to pay its employees.

Here's a Handful of Other Steps:

• Devise a way to estimate the turnaround time for each project or assignment — for example, collecting receivables — and set reasonable deadlines.
• Don't base your credit terms solely on your customers' payment histories. Consider adopting a broader policy that enables you to tighten, or relax, your credit terms according to the company's cash flow needs.
• Generate and send invoices while orders are being prepared for shipment, not after. Faster invoicing usually means faster payment.
• Make sure invoices are accurate and easy to read. Mistakes will not only delay payment but may send customers to your competitors.
• Develop tools to measure, analyze and project the productivity of both labor and equipment.
• Don't assign projects to employees who are overqualified for the tasks. Get the job done for the lowest possible payroll cost.
• Make sure every customer is aware of all the products and services your company provides. Is it possible that customers are shopping elsewhere because they aren't aware that you carry what they need?

Once your employees understand how they can contribute to the bottom line, higher profits will be close behind. While the country is in the grip of COVID-19, this may be more important than ever.