Malone & Co – helping businesses rise to the challenge of rising costs

Rising costs and inflation are having an impact on businesses across Ireland. As a result, controlling costs is more important than ever and accountants will be playing a key role.

Inflation levels in Ireland are running at levels not seen since the early 1980s and this is causing a significant squeeze on domestic and business finances alike. While the media has largely – and justifiably – focused on the effect this is having on the Irish people, the effect on businesses should not be underestimated.

With inflation at 9.1%, driven largely by increasing energy, fuel and food costs, and no sign of any immediate relief in the coming months, businesses should be planning for the short-term and looking at how their costs can be reduced or at least managed in the coming period. This will help them focus on their longer-term goals and should be done in conjunction with their accountants.

At Malone & Co we are seeing increasing numbers of clients looking for advice on how to manage and mitigate rising costs.

The firm has grown strongly in recent years and recruited an experienced and talented team who are skilled in helping businesses – of all sizes and in all sectors – to keep costs to a minimum and maximise their revenues and, of course, profits. The Malone & Co team now comprises 20 accountants from three professional institute bodies, four tax advisors, a solicitor, two bankers and accounting and payroll technicians.

Experienced team

Many of the team have been recruited from top accountancy firms and bring with them a wealth of knowledge in business. For example, we have Dave Hickey, FCCA, and a fellow of the Institute of Chartered Accountants Ireland. He is experienced in dealing with all aspects of accountancy, audit, book-keeping, payroll, personal and corporate taxes. He plays a hands-on role assisting clients with their day-to-day accounting requirements and is extremely capable and well renowned at solving complex financial issues that arise in his client portfolio.

There is also Louise Fisher, FCCA, and another fellow of the Association of Chartered Certified Accountants Ireland. She works closely with private clients across a wide range of sectors and industries and has extensive experience in accounts preparation, business and personal taxes.

As with all the team at Malone & Co, she enjoys building lasting relationships with clients, and ensuring they receive excellent care and service.

It is by building relationships and gaining a deep understanding of our client, their businesses and how they work that we can deliver incisive information and advice to them to help them to grow their business.

As every client is different, it means the approach taken has to be individual to them – which comes from that deep understanding we build up.

That said, advice can be split into two broad categories – action that is in line with the long-term goals of the business, or more short-term actions that can help to cut costs in the business quickly and ensure it has the best chance of achieving those longer-term goals.

Of course, some companies could require a combination of those approaches, and this is where accountants can add value by analysing the effects of inflation and other rising costs on businesses. They look at the likely impact of inflation in the future and then advise business owners accordingly on the strategy to take.

Finding efficiencies

Then, it is a case of focusing on different aspects of the business to see where efficiencies can be made, or opportunities capitalised on.

A spending review is a good place to start, going across the business. While this is something that should be done periodically anyway, whatever the prevailing economic climate, to ensure the business is running as efficiently as possible, it is more important now.

This should look at all spending and costs in the business. Sometimes, there are quick wins that can be achieved by switching to a cheaper energy supplier, or supplier of goods or materials, or renegotiating rates with existing suppliers. It may be that some costs can be cut out altogether, which is why it is important for all costs to be looked at in a review.

Streamlined businesses that operate to maximum efficiency are much more like to achieve their long-term strategic aims.

Alongside spending reviews, businesses should also be analysing efficiencies. Today, one of the core aims should be looking at how certain business processes can be automated. Automation is developing quickly and it can be of benefit to many workplaces, saving on time and labour costs, both of which can be redirected into other tasks within the business.

Allied to this, all labour and time costs should be investigated to ensure that employees’ time is being used in the most effective way. Could refocusing some employees onto other tasks help the business to improve? Some businesses use contractors, rather than having contracted staff – that needs to be assessed to see if it is the most effective way to use resources.

With rising costs, there is an impact on the price of the goods and services that business’ offer – only so many increases in costs can be absorbed, or internal efficiencies implemented, before it has to be passed on to the end user. What margin businesses want to earn must be considered – and stuck to. How any price rises are communicated to customers also must be carefully considered – and honesty is the best policy: rising costs are affecting everyone, so they are likely to understand.

Finally, and this may sound obvious, there should be focus given to profit. Specifically, businesses should assess which of the revenue streams in their business are the most profitable, an/or those that can withstand rising cost pressures most effectively. Focusing resources onto the more profitable elements of the business can help it to be more resilient to the economic turbulence ahead.

Opportunities

Rising costs are also creating opportunities for businesses looking to make acquisitions. Acquiring a business in the same sector can help to bring about efficiencies, such as in purchasing and merging the back office, that can bring much-needed cost savings to the enlarged business and help increase margins and add to the bottom line.

At Malone & Co we know that due diligence is crucial and assessing the target business’ financial performance is key. Many acquisitions don’t add value, but it shouldn’t have to be like this, and ensuring the financial aspects – including future earning potential – have been fully scrutinised before any contracts are signed gives more chance of a deal succeeding.

All these issues and more are addressed daily by Malone & Co’s team of experienced tax and accounting professionals. Malone & Co’s efficiency and quality of advice and services can be seen in how much the company has grown in the past couple of years. The staff offer clients a simple approach that is focused on the customer and constantly looks to add value to their business and improve their profitability.

Malone & Co. provides a range of accounting, auditing, bookkeeping, VAT, payroll, company secretarial services, and corporate services. This includes tax evaluation and planning for business, personal and family, tax residence planning for internationally mobile clients, tax efficient remuneration of owners and key staff, and revenue audits and investigations. The firm has offices in Rathcoole West Dublin and Naas in Co. Kildare.