CPA’s Tips Can Add Up to Big Savings
When two of Barry Schimel’s business clients committed suicide over money problems, Schimel, a certified public accountant, vowed to do something to prevent similar tragedies.
That something turned out to be a provocative and timely new book, “100 Ways to Prosper in Today’s Economy.”
The book was born in 1990, when Schimel, realizing the recession wasn’t going away, began asking his partners, staffers, friends and small-business clients for money-saving ideas.
Some of the best ideas are as simple as locking your supply closet to reduce office supply costs and making daily bank deposits to boost cash flow. A more esoteric chapter explains how to recapture estimated income tax overpayments. Paying bills on time and only when they are due is another money-saver frequently overlooked by small-business owners, said Schimel, whose practice is in Rockville, Md.
If your sales are off but you don’t want to lay off a valued employee, how about temporarily “leasing” that person to another company? Or cut your paper costs in half by insisting that everyone photocopy on both sides of the paper.
One way to combat the astronomical cost of providing health insurance is to ask your employees whether or not they are covered by their spouse’s health insurance plans. If they are, you might be able to save money by offering them another kind of benefit instead of duplicating the coverage.
Stan Pickett, president and founder of the Rockville, Md.-based American Language Academy, has embraced Schimel’s tips and put many to use at his 21-year-old firm, which teaches English at a dozen locations in the United States and several in Venezuela.
“We set up an employee referral program to save the cost of using an employment agency,” Pickett said. Any employee who recruits the right person for a job receives a $500 bonus.
At Schimel’s suggestion, Pickett locked the supply cabinet and installed a telephone answering machine to capture after-hours calls from prospective students.
“We have saved hundreds of thousands of dollars with Barry’s help,” Pickett said.
Michael Martin, president and owner of Dudley Martin Chevrolet in Manassas, Va., said Schimel’s suggestions have changed the way he does business.
The dealership’s service department recently expanded its service hours, staying open until 8 p.m. on Tuesdays and Wednesdays and opening from 8 a.m. to 1 p.m. on Saturdays. Martin also challenged his 21 employees to save one full-time job by each agreeing to take eight hours off without pay each month.
“We also went to our outside vendors to restructure and renegotiate all our contracts,” Martin said. He solicited four bids for a maintenance contract and trimmed $40,000 from his garage-keeper’s liability insurance policy by shopping his business around to several risk managers.
Dependent on heavy advertising to sell cars, Martin slashed his advertising costs by negotiating a volume discount with his advertising agency. The agency agreed to the lower prices because “they’d rather keep us as a client than lose us.”
Martin also offered customers a 10% discount if they would pay off their overdue bills by the end of the year. “We received four large payables,” he said.
Meanwhile, Schimel is busy teaching his 100 ways to accountants and other professionals across the country.
“It’s not a good idea to waste dollars in good times or bad,” said Schimel, who has helped hundreds of small-business owners sort out their finance and tax problems over the last 25 years.
Schimel’s book is published by Acropolis Books Ltd., 13950 Park Center Rd., Herndon, Va. 22071. It is available for $12.95. For information call (800) 451-7771.)
Has your company come up with a creative way to cut costs in these tough times? Send your tested idea to: Jane Applegate, Los Angeles Times, Times Mirror Square, Los Angeles, Calif. 90053.
