Expense reduction has been the drumbeat of accountants since the beginning of time. It may seem that your accountant only wants to act as a gatekeeper and that he/she will answer an emphatic "no" to any question that might incur an expense.

I believe that there is a balance between revenue generation and expense reduction. However, trimming the fat is important and should be reviewed on a regular basis. Here is why; if you have a $2 million company with a 35% gross profit margin and a 10% net profit margin, that means that you are spending $1.3 million on the cost of goods and $500k on operating expenses. If you do the quick math, a 1% decrease in both the cost of goods and operating expenses equals a cash savings of $40k! That's a lot of money!

But if it was that easy, everyone would make a 1% correction and reap the benefit. So where should you look to make this reduction? Here is where to start:

1. Wages - this is a touchy place to discuss reduction, but probably the most important. Reducing wages doesn't necessarily mean layoffs. Review your overtime policies to see if you are consistently paying large amounts of overtime. By simply adjusting your overtime policies, significant savings can be realized.

2. Travel - who doesn't like to spend money when you're out of town? However, travel spending can quickly get out of control. Set limits on what can be spent on travel, and incent employees to book lower cost flight/hotels whenever possible.

3.  IT - so much of IT has been moved to the cloud where large up-front costs of hardware and software have given way to more consistent monthly fees. This is not only more efficient but generally much more cost effective.

4. Company Parties - we all like to unwind. Parties are fun, but can also get very expensive very fast. For your next company shindig, scale back a little. Provide appetizers instead of dinner. Or, if it's employees only, try a potluck.

5. Materials Purchasing - make sure that you are taking advantage of early pay discounts. If your vendors don't offer an early pay discount, take your business to one that does.

The point here is that by spending a little extra time and being creative, you can save thousands of potentially wasted dollars.