Cost control, reducing overheads, and expense management

Cost control, reducing overheads, and expense management

Practical guidance from an experienced accountancy firm

When a long-established business first comes to us for help with falling margins, the story is often the same. Revenues feel healthy, invoices are paid on time, and yet profits are slimmer than they should be. The director will say, “We’ve tried saving where we can, but nothing changes.” What usually lies beneath that frustration is simple: the business is cutting in the wrong places, or it is trying to cut without knowing what actually needs cutting.

Effective cost control is not about blindly cutting budgets. It is about understanding where money is spent, why it is spent, and how to change behaviour and processes so your business retains value while lowering its cost base. As an accountancy practice with extensive experience advising companies on finance, tax and commercial matters, we help clients apply pragmatic, measurable steps that protect quality, cash and future growth.

What we mean by cost control

Cost control is the disciplined process of measuring, governing, and improving expenditure so the business operates within budget and meets financial objectives. It is distinct from:

  • Cost reduction: permanent reductions in the cost base (for example, replacing an inefficient process with automation).

  • Cost avoidance: actions that prevent future costs (for example, regular maintenance to avoid expensive repairs).

Good cost control protects margin and cashflow; poor cost control can damage customer service, staff morale, and long-term competitiveness. The objective is sustainable savings, not short-term disruption.

The starting point: measure before you act

The single biggest error organisations make is trying to cut costs without clean data. We recommend a short, focused measurement phase:

  • Tidy and sort the chart of accounts. Ensure spend is coded consistently so it can be reported by department, project, and supplier.

  • Classify costs. Split spend into fixed (for example rent, salaried staff) and variable (raw materials, courier costs, etc.), and tag direct versus overhead costs.

  • Identify cost drivers. Which activities cause the cost to rise? Examples include machine hours, deliveries or staff hours.

  • Build a one-page dashboard. Useful KPIs include overheads as a percentage of revenue, payroll as a percentage of revenue, cost per unit or per project and inventory days.

If producing this reliably is a burden, our management accounts and KPI dashboard service creates a monthly one-page view that will help boards and managers make decisions.

A practical framework: govern, prioritise, deliver

We advise applying a three-stage approach:

  • Govern and prioritise. In most businesses the top 10-20 cost lines will represent the bulk of spend. Concentrate effort there rather than scattering time across dozens of small items.

  • Pilot and measure. Test changes on a small scale and collect before/after data on cost, quality and customer impact.

  • Embed and report. Roll out successful pilots, update budgets and make savings part of routine management reporting.

This approach keeps things under control and reduces the risk of unintended consequences.

Practical levers that deliver

Choose the levers that fit your business model. Common high-impact areas we see include:

  • Supplier and procurement optimisation

  • Workforce flexibility

  • Process redesign and automation

  • Space, utilities and subscriptions:

  • Inventory and supply chain improvements:

  • Finance and tax optimisation:

  • Outsourcing non-core functions:

How to measure success

Track outcomes as rigorously as you measure costs. Useful KPIs include:

  • Overheads as a % of revenue

  • Payroll as a % of revenue

  • Cost per unit / cost per project

  • Inventory days or turnover

  • Cost variance (actual vs budget)

Always include implementation costs and measures of quality or customer satisfaction in any evaluation.

Common pitfalls to avoid

  • Cutting quality - savings that undermine customer experience are a false economy.

  • Damaging morale - large, opaque cuts can decrease productivity and increase turnover.

  • Poor measurement - without before/after data, “savings” are guesswork.

  • Ignoring compliance - changes to contracts or working practices must respect employment and regulatory law.

We work with clients to ensure changes preserve quality, maintain compliance and are communicated transparently.

How Halliday Styan can help

At Halliday Styan, we offer a cost health check. A one-page snapshot that highlights your top 3 - 5 opportunities to reduce costs and track progress. To make that most useful, we would ask for a recent management P&L, balance sheet, and a note of any pressing pain points (cashflow, supplier concentration, payroll pressure). If that sounds useful, please get in touch and we will take it from there.