Cost Cutting & Cost Saving measures in
a Real Estate company.
1.
Vendor Negotiation in
line with GST: There can be calculated negotiations. Assign a
team to calculate the gains to contractors or vendors because of GST. Vendor
should be able to pass on the GST gains to us by way of negotiated pricing.
Buyer may negotiate till that point as the vendor’s profit margin is not hurt.
Knowing vendor’s GST benefits will give an edge while negotiation discussion.
2.
Property Registration
Costs: Are property registration costs under control.
Are market quotes form independent agents / professionals are in line with our
in-house expenses.
Consider
if online registration facility provider can be assigned. Such service provided
carry out online registration facility where physical presence is not required.
Department expenses can be avoided in such case.
3.
Review overtime and
paid leave policy: This can be further categorised into
department wise policy to match with industry standards.
4.
Analyse wastage of
labour: Department charges or any other labour charges may
be wasteful if they are kept on standby or are assigned in excess. Also
sometimes shortage of few labours may add to effectiveness of whole batch of
labour.
5.
Economic order
quantity: Are the purchases are made in proper time so
that there is no wastage of labour cost simultaneously there is also no excess
blockage of funds in unnecessary stock pile up.
6.
Party wise review:
It should be made a policy that Accounting of expense must be routed through
Party’s Name. Also monthly report on party wise total payments may be obtained
for all sites combined to find out the total payments. Many times small volume
payments accumulate to large amounts and scope for negotiation on the basis of
volume can be identified.
Further
the department charges should be separately accounted. For example there should
be two ledgers one for XYZ LABOUR CHARGES and another as XYZ DEPARTMENT
LABOUR CHARGES. Analysis and negotiations can be improved based on this.
7.
Sales of scrap:
Proper treatment of sale of wastage cement bags, steel leftovers etc. for
example measuring scrap steel weights over two weighing machines.
8.
Optimize finance costs: Extensive financial
budgeting & planning. For
example preparing a budgeted cash flow statement for effective use of credit
facilities and thereby optimizing finance cost.
9.
Reducing cost of
service to customers: Time saved is money saved. Save employees time by implementing
optimal communication methods, processes and document handling. For example
Extensive use of cloud storage technology for faster availability of documents
and data and thereby saving time.
10.
Improving inter
department relations within the company. Nothing like the
employees who are working voluntarily for better utilization of resources. It
will save time and effort, it will avoid duplication of work. Team leaders/
department heads should identify the points of integration with other
departments and try to optimize the time taken for such interactions and
corresponding response time.