5 ideas to reduce your capital expenditure on business tech
by Rasheeda Russell on Jun 07, 2022
99% of UK businesses are SMEs and statistics have shown that during the pandemic they have been hit hard. Now that we are in the second year of the pandemic, a range of business support schemes and the acceleration of the vaccine rollout have proven helpful in boosting business confidence. Nevertheless, businesses still need to stay nimble. Managing costs and expenses efficiently will help you for any future rainy days. Using technology is one of the most effective ways to do so, yet there is a significant need to educate SME entrepreneurs to leverage this technology in their business. It so happens that this topic falls in our wheelhouse! Keep on reading as we’re about to share some ideas on how to reduce your business capital expenditure through technology 🤓
You might have heard that buying refurbished tech can reduce your business’ carbon emissions. But did you know that it’s also good for your bottom line? Buying refurbished tech devices is up to 60% more affordable than buying new. When you buy new, you’re paying for the depreciation. When you buy refurbished, someone else has taken the hit. However, you should be careful when you decide to get refurbished tech. Are they credible? Do they have a guarantee in case anything goes wrong? At Klyk, all of our devices come with a 1-year warranty. Before you klyk “Add To Cart”, read our guide for buying refurbished tech here. With supply and demand drying up, refurbished tech devices will also hold their value for longer than 1 year!
Free your money by eco-leasing your tech
Every business needs computers and phones. The conventional way to get these would be to invest a big chunk of your money and record the spending as capital assets. A more prudent way to go about this is by leasing them instead.
Leasing allows you to spread the cost and use your money on other priorities – such as marketing – so that you can generate profit sooner. It allows a business to match their revenue with the cost of equipment, rather than spending shareholder capital. Lease payments are considered as an expense deductible from profit rather than a capital allowance. This means you can save an extra 19% (the rate of corporation tax).
This can help not only for financial accounting, but also in your carbon accounting. You can reduce your environmental footprint because leasing companies will make sure your used tech gets a second life. Ultimately, this will reduce carbon emissions and electronic waste! Learn more about Eco-Leasing here.
Cashing out your old tech devices
Before the pandemic, working in the office with reliable desktop computers or laptops was the norm. In today’s working environment that’s no longer the case. So what are you going to do with these devices, chained to your office desks? Sell them to recycling companies. Reduce your ownership cost even more by selling your tech at the right time. Timing is crucial because if you sell too late their value might depreciate further. It’s important to note that not all recycling companies provide a buyback programme for every type of tech device. For example, some of them are specialised in phone recycling. At Klyk, we buy back your business laptops, PCs, smartphones and tablets.
All aboard the Gig Economy train
Resources come at a cost and most businesses try to keep overhead costs as dynamic as possible. One of the ways to go about it is to shift more fixed costs to variable costs – which allows you to have a bigger financial flexibility.
One of the biggest portions in a company’s budget is to pay for salary – because you want the best people in your team! But for some the need to hire full-time team members is not a priority yet, therefore they choose to outsource experts to help with specific projects. This is reflected in the new trend of Gig Economy, resulting in the rise of freelance marketplaces such as Fiverr and Upwork. This way, you get to produce growth-focused projects without adding more fixed cost to your accounting. Another way to help minimise your fixed costs is to automate your administrative processes, which we’ll discuss next.
Streamline your daily operations with SaaS automation
In this digital age, a lot of companies are leveraging the vast amount of Software as a Service (SaaS) products. Some examples of these SaaS companies are CharlieHR and Xero. They help businesses to automate their human resource management processes and accounting processes respectively.
These services help to digitise and/or automate operations which help to significantly streamline your business processes – giving you back time that you can spend on building the business itself. They are also relatively affordable especially for smaller businesses, because they offer subscription-based services with various models such as pay-per-user. Another good news for your bottom line is that very recently the UK government announced a programme that will subsidise software investment for SMEs up to 50%!
By adopting technology, we can reduce business expenses and increase productivity. Recent research found that if more SMEs move towards digital technology, this could unlock a £145bn productivity boost for the UK economy. So, what do you think? If you want to discuss how to implement technology without breaking the bank, get in touch with us today and we would be happy to help!