Hello everyone! Thanks for taking a minute to check out the Business Discussion page. Today I'm sharing an article from the
QuickBooks Blog that offers a few options to improve your business efficiency during times of economic downturn.
If you've read any of my posts in the past, you know I'm a fan of starting off with a definition. Business efficiency can be defined as, "how effectively a company uses its resources (money, labor, materials) to produce an output (products and services)." It also answers the following questions:
- How productive are my employees?
- How much waste does our company produce?
- Are we seeing a positive return on the tools, materials, and talent we invest in?
There are several ways to gauge business efficiency. Here are a few of the main areas to focus on:
Overall profitability
Fixed asset turnover
Receivable turnover
Inventory turnover
Manufacturing
Supply chain management
Customer service
Accounting, finance, and payroll processing
Business processes refer to how a company handles the various operations mentioned above.
Labor productivity measures how much employees accomplish during an average workday.
The writers states, "Business efficiency should always be top-of-mind for business leaders, but it comes even more important during times of economic uncertainty." Check out the full article linked above for even more info, as well as the benefits of improving business efficiency. Have a good one folks!
