How to reduce operating costs
without cutting the people who produce the revenue.

What it is

Reducing operating costs means measuring what each recurring rand actually buys — per supplier, per process step, per hour worked — then removing the spend that produces no output, rather than cutting a fixed percentage off every budget line.

What the engagement covers

1. 1.Rebuild the cost base by driver, not by category

   Management accounts group cost by type: salaries, repairs, consumables. That hides the driver. Rebuilt from bank, payroll, supplier and stock records, the same spend resolves into cost per job, per vehicle, per shift or per client — which is the only level at which a cut is safe to make.

2. 2.Test supplier terms against what is actually invoiced

   Escalation clauses, minimum charges, delivery fees and expired discount tiers drift out of line with the signed agreement. Comparing 12 months of invoices to the contract is the single most reliable recovery we run, and it typically returns between R80,000 and R400,000 a year in a business turning over R20m.

3. 3.Price the cost of rework and correction

   Work that is done twice is paid for twice, but it never appears as a cost line. Timing the core workflow shows how many hours go into corrections, credits, re-deliveries and disputes, and converts that into an annual rand figure the owner can act on.

4. 4.Measure labour utilisation before touching headcount

   Most teams that feel understaffed are under-utilised: available hours are consumed by waiting, chasing information and manual re-entry. Fixing the sequence usually clears the backlog without a new appointment, and it protects the capacity you already pay for.

5. 5.Bring energy and continuity spend back under control

   Diesel, generator maintenance, battery replacement and standby capacity became permanent line items during load-shedding and were rarely re-sized afterwards. Matching capacity to current outage patterns and tariff structure is a straightforward, once-off saving.

6. 6.Check pricing and compliance exposure last

   Cost reduction stops working when revenue is under-priced or when a VAT and payroll structure no longer matches how the business trades. Both are checked against source records so a cost saving is not consumed by an assessment later.

What it costs in South Africa

Fees are fixed in advance and quoted in the currency that suits you — ZAR, USD, EUR, GBP, AED or AUD — with the amount confirmed in your written quote.

Common questions

1. How do I reduce operating costs without retrenching?

   Start with spend that produces no output: supplier terms that drifted from the contract, rework hours, standby energy capacity that is larger than current outages require, and pricing that has not moved with input costs. In our engagements these lines carry more recoverable rand than payroll does, and they carry no capacity risk.

2. How much can an SME realistically save?

   Across 19 diagnosed businesses, quantified recoveries have totalled more than R12.4 million. In a business turning over roughly R20 million a year, supplier and contract variances alone commonly return R80,000 to R400,000 annually. Your own figure is only credible once it is measured, which is what the diagnostic does.

3. Why not just cut every budget by 10%?

   A flat cut removes the same proportion from spend that produces output and spend that does not, so service quality falls while the waste survives. Cutting by driver removes the second category only, which is why the savings hold instead of reappearing three months later.

4. How long before the savings show up?

   Diagnostic research and planning take 2–3 weeks. Supplier and contract corrections typically land in the following billing cycle; utilisation and rework changes show in the numbers over 60 to 90 days because they depend on the workflow change holding.

5. Can my accountant do this?

   An accountant reports the cost that was incurred, in the format SARS requires. This work explains what drove it and what can be removed without losing output. The two run alongside each other — we work from the same records your accountant produces.

6. Do you work outside Gauteng?

   Yes. Financial, supplier and pricing analysis is done remotely nationwide, with on-site workflow timing in Johannesburg, Pretoria, Cape Town, Durban, Gqeberha and Upington.