We all want to save money, who doesn’t? It makes us feel so good on the inside. However, sometimes the best way to save money isn’t to cut costs, but rather, how your costs are managed. There are so many books and posts written about how to not lose money – like this one from Inc. However, no one really talks of the future of cost management and new forms of it.
Cost management has always been a tricky thing to figure out. Like everything in our lives, it evolves. But, it is an evolution that takes it’s time and sometimes can leave companies with this “boiling frog effect”. Before you know it you’re using a system from three decades ago and are losing money due to poor cost management.
Do you lose money through improper wage investment?
Are your teams running at top efficiency? It is all too often that we believe this to be true, however, more often than not money is falling out of the company wallet like a leaky pipe inside the wall, and next thing you know you’ve got more work than employees, I’ve seen it a thousand times.
As time goes by wages go up but work remains the same. More often than not right now there is somebody working on a task that is literally below their pay-grade, by literally I mean it makes no fiscal sense for them to be working on said task. Managers that keep putting over-qualified employees on simple tasks may seem productive, but sometimes this can be a huge waste and overall it will lose money.
Allow me to paint a picture for you: Imagine if you will, that you have 5 employees in your programing department. A Senior Programmer and some Junior Programmers, all too often, simple bug fixes roll out and they get assigned to any random programmer. Here is where money starts to fall through the cracks unintentionally. Let’s say some of these bug fixes are sent along to the senior programmer and he spends 4 hours getting them knocked out. Now, not only was the senior programmer taken away from higher priority tasks that require his work, but his hourly wage was spent on a task that a junior programmer is more suited for. If you multiply this situation by days, months…, and by every department you have at your company, you can better imagine how improper cost control causes companies to lose money.
In today’s world there isn’t many ways of getting around this problem, aside from extreme task tracking of who is doing what, this could probably lead to even more wasted time of managers having to keep track of who is doing what, and when what is going to be completed all through emails.
Cost management getting a better grip on wages expense
One of the biggest payouts of getting cost management right, is the ability to break down wages expense properly. For the longest time now, wages expense has been treated as a pool to throw the total salary of employees. The biggest problem is that in the past there has been a large lack in time tracking – or how to gauge and allocate the time of your team. Previously, to get accurate data on ‘’real’’ department wage spending, extensive research work had to be done in these areas to get numbers that were still guestamites in the end. Nowadays we have task and team managers that calculate how much time employees are spending on each task inside their company. With this data you can group up how many hours employees are working paired with how much they make to get very strong and reliable numbers.
Not only can we get solid reads of cost management on a team-to-team basis, but innovation has brought about the ability to widen the options we have to measure expenditure. Investigating into where costs fall between teams in complicated tasks can be a hassle even with all these new bells and whistles we have at our fingertips. One of these great tools are called task types.
Typing it all out?
Task Types are a new method to fill in this gap, catching every penny is the way we stay ahead in business. There are quite a few ways you can break down task types and really, it all depends on the way your company is set up. In most cases, we can organize task types into two forms, specific task types and general task types.
As mentioned above general task type is the new way of breaking down where wages expenses are going to get split into. They can be used in so many different ways across teams. Let’s take a general task types of content writing (what I am doing right now). This can be done is many forms across many departments, be it writing templated emails, content for a blog, translation, etc. Having a general task type attached to every task not only tells us what team member spent how much time/money in what project but in what type of task for that said project.
Adding a deeper layer to the general task types, I want to show how specific task types can be equally useful. Let’s say instead of having a general task type for content creation, we create various smaller and much more specific task types for all of the areas listed above (translation, blog content, etc.). By organizing this info into small very precise pools it gives management and business owners the ability to better make confident decisions and with near surgical precision.
Let me give you an example: say you have an employee working away translating user manuals for a product into various languages. Managers can now look at the data collected from tasks completed and use cost management to make decisions, maybe it would be cheaper for the company to outsource a part or all of translation to better fall into line with projected costs on the market.
What’s the status?
But wait, there’s more! Another tool management has at its disposal now-a-days is the ability to track how much time tasks sit in passive phantom pools of time. These are called task statuses. Have you ever finished your work on a project and passed it along, how much time did it spend waiting to be picked up by the next person in line? Alternatively, how about when you finish a task and have to wait for approval. Within the new world of work all time must be tracked, not only how much you worked on projects with types, but how much time it spent in various passive statuses.
Nevertheless, how is this useful for not losing money in cost management? To put it simply, more info helps managers make better decisions which saves money. If you finish a graphics task and switch the task from “tasks being worked on” to “waiting for implementation” there is now a separate clock counting the time for that task status. If these numbers get too high for various assignments ‘’waiting for implementation’’ it can cause delays where before, managers needed to do heavier investigation to discover what was going on, which in turn makes for unnecessary costs.
With this new data managers will quickly discover that maybe a temporary contractor will be necessary to hire for this project to prevent delays and unnecessary cost. The examples go on and on, and task statuses can be literally anything that counts as a passive ticking clock. With this, managers will never lose another second of useful data.
Cost management with Runrun.it
But Drew, you ask, how do I get on the right track? Runrun.it has everything you need as a manager to get cost management under control and prevent losing money it even has the task types built in with customizable estimated task lengths. Runrun.it boosts output by as much as 25% by streamlining paperwork and thus increasing productivity. Best thing about it is that you can try it for free.