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.