Lost&Found Inc.

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Minimizing Your Merchant Processing Fees Without Changing Your Vendor

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For most business owners and managers maximizing revenue (offense) and minimizing costs (defense) is business 101.  Although it sounds simple, it is remarkable how many business owners and executives focus solely on offense and forget all about defense. Many people lose sight of the fact that with every dollar in new revenue, only a fraction is added to the bottom line. Conversely, every dollar reduced in operating expenses contributes 100% to the bottom line. 

For good reason, we celebrate the sales rep who brings in a $10,000 account, but when was the last time we celebrated the CFO or controller for cutting $5,000 in telecommunication, waste management, office supplies, shipping, or merchant card services expenses? All things considered in the analogy above, the CFO or controller likely made a much more meaningful impact to the company’s profit. All $5,000 of his/her cost savings contributed to profit, whereas the $10,000 sale likely only contributed $2,000 or $3,000 after commissions and cost of goods sold are considered. Plus, these cost-savings will continue to deliver incremental profit to the company year-after-year for the life of the business. 

Please note, I don’t advocate renouncing your praise of sales people for bringing in new sales. At the end of the day, if it wasn’t for sales, there wouldn’t be a business. It is a lot harder to make a sale than to cut a cost, and it should be celebrated. The point of my analogy above is to show that since cost reduction initiatives have such a direct impact on overall profitability, it is worthwhile to invest as much interest and energy on improving your defense as you do on your offense. 

If you are a key financial decision maker, I encourage you to quantify your savings and reward yourself with the incremental profit that you have brought about by following these simple steps. If you are a CPA or an independent bookkeeper, I urge you to use this information as incredible value-added advice that can help your business customers increase their profits. If you are an employee, I encourage you to frequently remind your boss how much you have added to the company’s profit, and add it to your list of accomplishments.  Saving money is critical in these uncertain economic times and perhaps it’s time we celebrated defense as well as offense.

 Adam Pflaumer is the Lead Auditor for Lost & Found’s Electronic Payments Processing Division. 

 

 

Dumpster Diving Can Save You Up to 40%

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Did you know that dumpster diving can save you money?  Not on groceries, but on your corporate waste and recycling expenses.  Many businesses set up waste management contracts and never look back.  The company takes away the trash, some portion is recycled and the rest ends up…. wherever waste goes in your area.

But did you know you could be overpaying by a substantial amount for basic trash hauling and recycling?  Many people sign their contract with a waste management company and move on to the next issue, never giving it a second thought.  But, as margins are continually squeezed, it is becoming apparent that all expenses should be evaluated frequently to look for savings and that includes places you may not have looked before.

Up to 90 % of all companies unknowingly are overpaying for waste services.   With new technologies and additional recycling opportunities it is easy to cut costs today. Many companies send out a few RFPs for waste management companies, but fail to consider all the things may have changed since their last RFP.  Additional savings could be found, but it is unlikely that your vendor is going to point out an area where they can reduce their fees.

Having an outside firm conduct a waste audit of your dumpsters could save you time, money and provide a path to greener pastures…literally.  Waste auditors will go through your dumpster to see what type of waste you have and how it is being handled. Depending on the type and amount, you could be in for substantial savings if your current waste management company is not utilizing available technologies or appropriate recycling best practices.

The good news about a waste audit is that it does not require you to dumpster dive.  Instead the trained waste professionals who conduct these audits are looking for ways to reduce your costs by first reviewing the actual waste itself and then reviewing the waste management contract.  Very often they find overcharges and excessive fees that get refunded to the client’s bottom line and those savings continue for many months into the future.