3 tips to plan a cost control strategy in Hong Kong

Even during good times, cost control is a vital factor for Hong Kong businesses and directly leads to savings through better working practices.

In Hong Kong where there is a significant presence of multinationals and SME’s – some of which operating with limited financial resources – keeping control of expenditures is, more than ever, of high critical importance.

Here are a few pointers to consider when planning a cost control strategy.

Suppliers are an important part of the equation
Businesses that have strong and strategic relationships with their suppliers will find themselves in a solid position of productivity. They will be better protected against the vicissitudes of the economic environment, while also being in a superior position to grow.

To control costs in this area, executives need to ensure that they have strong relationships with their suppliers. What should be done from the outset, or when a contract is up for renegotiation, is to identify which suppliers not only represent good value for money, but also the best working arrangement.

In addition to that, executives can control costs through assessing every aspect of the supply chain and put in place ordered practices.

If, for example, businesses approach spending on an ad hoc basis – when supplies are running low – they are letting spending get out of control.

Every purchase comes with transaction costs. By centralizing all payments into a database, through the adoption of a corporate card, businesses can identify any positive or negative spending patterns and rethink their whole spending approach.

This then puts them in a more informed position, which increases their negotiation capabilities with suppliers. By informing a supplier that a new strategy has been established, they open up opportunity for dialogue – how can we both go forward in a way that is mutually beneficial?

Rethinking the way you do meetings
Hosting regular meetings and attending important conferences remains important to businesses, even in an age of cost control.
Internally, it is an effective way of keeping staff up-to-date and is an effective way of generating new ideas. Externally, they help executives and employers alike keep in the loop with developments and provide ample opportunities to network.

However, they can be costly affairs, and organizations need to rethink the way they approach them.

Within the workplace, meetings should be much more focused. They should be time-efficient, detailed and only be attended by people who directly contribute and benefit from them.

As for external meetings, executives are of the opinion that they are as essential as ever. Consequently, they remain an expense that is unavoidable. Making every trip count is one way corporations can keep in control of costs.

Corporate cards can help in this respect. For certain individuals within a company who are frequently traveling to and from Taiwan for example, a corporate card delivers savings through spending.

By acquiring points with every purchase, be it a plane ticket, a hotel booking or meals, businesses can reap significant rewards.

Make corporate cards part of the organization as a whole
While corporate cards offer brilliant savings in terms of business travel, they can benefit an organization in a much more comprehensive way. They represent an enhanced way to manage costs through tighter control mechanisms and visibility.

Corporate cards help to advance working capital management by delivering greater visibility with cash flow, improving the efficiency of processing payments – through e-payment technologies – and enhancing compliance.

Additionally, there are very specific ways that businesses can put in place considerable cost control mechanisms though the deployment of corporate cards. This involves putting in place restrictions on what can be spent, streamlining payments with repayment schedules and working out better practice through detailed reports.