Maximize Profit by Expense Review – Tips from the CFO
I enjoy reading the monthly plant manager blogs and I hope you do as well. I would like to share with you my slightly different view when I look at these informational pieces and ideas that hopefully stimulate additional conversation and thought.
Of course, we are all concerned about yield and margins! However, do we make a concentrated effort to look at the soft savings or costs that often negatively impact the bottom line?
What are the tax savings opportunities with the new Tax Bills in Washington? Have we maximized our corporate deductions? How are our plants performing from a safety standpoint? Is skipping some effective maintenance impacting our corporate EMR rating?
Speaking of routine maintenance…have you really thought about what benefits would or could be gained by ensuring your equipment is running to full efficiency? Are there grants from utility providers that may assist in supplementing the overall costs of purchasing new heating equipment?
Depending upon the corporate filing status, there may be an opportunity to benefit from the IRS code Section 179 Bonus Depreciation that allows, from a tax standpoint, utilizing depreciation amounts up to $ 500,000.
Many of the projects involving Hydro-Thermal heaters and tanks qualify for this tax opportunity. I would recommend speaking with your tax professional to see if this is something your company can take advantage of.
We all strive for safety in our workplace. One injury can have reaching negative affects on the company’s Employee Modification Rate. Not only is there an injury that our valued employee must deal with, there is possible downtime and loss of efficiency. Further, the injury claims can negatively impact your EMR rating for a number of years, costing additional monies for worker’s compensation insurance.
Sometimes we think that saving money on repairs ultimately saves money in the long run. I try to quantify the net cost of some equipment not running at 100% effectiveness. What if your car was getting 25 mpg normally and because you haven’t changed the air filter in a long time, the mileage per gallon drops down to 21 mpg? How much fuel is wasted over a year’s period when a quick air filter change would ensure your vehicle is running at 100% efficiency? Make sure your preventative maintenance program is up to date and functioning properly.
In addition, would you like receiving support when it comes to paying your bills? Many energy efficiency programs are available through utilities and other governmental agencies that can supplement the cost of acquisition of new hydro-heating equipment.