Every business owner and CFO understands the basics of cutting costs. These conversations typically start around the biggest expenses, like labor and rent.
But you don’t need to reduce your headcount or move to a cheaper location to cut operational expenses. There are dozens of other smaller expenses hiding in plain sight that add up to tens of thousands monthly.
And over time, the costs quietly creep up and eat into your profits.
Nearly every single business we work with is paying unnecessary fees with outdated pricing structures and paying for services they barely use. Most of these expenses can either be reduced, negotiated, or eliminated altogether.
I’ll show you the top seven expense categories where my team finds the biggest savings opportunities.
1). Waste Management and Recycling
Every business with a physical presence produces some form of waste on-site. At a minimum, you’re looking at trash hauling and recycling, likely once per week. If you’re running a restaurant, hotel, grocery store, or another operation with complex waste streams, your waste management contracts will be a bit more involved.
But regardless of where you fall on this spectrum, I can almost guarantee that you signed a waste management contract years ago and probably haven’t thought about it since.
That’s exactly what haulers count on. The waste industry operates with minimal price transparency, allowing your provider to effectively charge whatever they want with no resistance.
- Automatic annual rate increases (often 3-5% or tied to CPI)
- Fuel surcharges that fluctuate without explanation
- Environmental or regulatory fees that don’t even apply to your business
- Charges for services you never requested
- Paying for extra pickups that you don’t need
This is all standard practice in the waste management industry.
Start by auditing your current service level. Are you paying for twice-weekly pickups when once a week would be plenty? Check your container sizes, too. Downsizing your dumpsters can also save you thousands.
The real savings come from understanding your contract terms. And everything in there is 100% negotiable.
Read More: 11 Signs You’re Overpaying for Waste Removal Services
2). Shipping and Fulfillment
Shipping costs have exploded in recent years. But most businesses still use the same carriers and service levels that they’ve always had out of pure convenience.
Here’s a secret. If you’re relying solely on your carrier’s published rates online, you’re leaving serious money on the table.
Any business doing moderate shipping volume should be able to negotiate custom rates that beat published prices. Carriers offer dozens of discount programs based on volume, package dimensions, and destination zones.
But you don’t get these discounts automatically. You have to request them.
You can negotiate directly with your current provider. Alternatively, 3PL providers can sometimes negotiate better rates than you can individually. They aggregate volume across multiple clients and have established relationships with carriers. And the cost of their services more than pays for itself by the savings they deliver.
I put together a list of red flags that your business shipping fees are too high. Check it out, and if any of these apply to you, then there’s room for serious savings.
3). Credit Card Processing
Payment processing and merchant services fees are likely your third or fourth largest expense.
This industry thrives on complexity. Processors bury hidden fees in statements and try to confuse you with hundreds of line items and industry jargon that’s nearly impossible for the average person to understand.
Here are some of the most common ways we find processors overcharging businesses:
- Random Monthly Fees: PCI compliance fees, statement fees, settlement funding fees, risk assessment fees, batch fees, (there are literally dozens)
- Frequent Rate Hikes: Processors raising your rates at least once every 12-18 months for no reason and no added service benefits.
- Deceptive Pricing Structures: Flat-rate or tiered pricing contracts with extra margin built into your base rates.
- Assessment Padding: Passing through fees from the card networks at inflated rates and pocketing the difference.
The craziest part about credit card processing is how fractions of a percentage can cost you tens of thousands of dollars at scale.
Our team has found $31 million in annual savings for our clients, and we find overcharges on 96% of statements that we audit.
And you don’t need to switch providers to save money here. Everything can be negotiated with your current provider. You just need to know what fees to look for and how to ask for a price reduction.
4). SaaS Subscriptions
There’s no doubt that software-as-a-service has made business tools more accessible than ever before. And many of these tools are critical to your company’s operations.
But this industry has already created a new problem: subscription creep.
SaaS solutions account for 85% of all business software spending, with the average company using 106 SaaS apps.
If you run a SaaS audit, you’ll likely find:
- Employees who signed up for free trials and never canceled
- Multiple tools that serve overlapping functions
- Software that was used for a specific project that has already been completed
- Different departments paying for subscriptions that could be consolidated
- Annual rate increases or promotional periods that have since expired
Beyond eliminating software solutions that you no longer need. You can also negotiate better terms with your existing SaaS providers.
In a case study of 20,000 SaaS contracts from 2,500 suppliers, businesses saved over $349 million simply by negotiating better rates.
5). Insurance
Business insurance is another one of those expenses that most owners review annually, nod at, and pay without much scrutiny. You may raise an eyebrow and think “that’s more expensive than last year,” but that’s likely where the conversation ends.
The thing about business insurance is that your provider always wants to give you competitive rates early on to secure your account. But from there, raising rates is the new normal.
Even if you haven’t submitted any claims, expect your rates to increase over time.
And unless you’re shopping around for coverage every 2-3 years, you have no idea that your premiums are no longer competitive, and you’re likely overpaying by 20% or more.
- Commercial property insurance
- Workers’ compensation insurance
- Commercial umbrella policies
- Business owner’s liability coverage
- Professional liability insurance
- Commercial auto insurance
- General liability insurance
The list goes on and on.
Every single one of your policies should be audited, and there’s likely savings opportunities for each one.
Bundling policies with a single carrier can often create better discounts, but this isn’t always the case. Sometimes unbundling and using specialists for different types of coverage can get you better overall pricing.
Assess your deductibles, too. If your policies have low deductibles but you’ve never filed a claim, raising them can dramatically reduce your premiums. And the money you save here can exceed your out-of-pocket costs if you ever do need to file.
6). Payroll Processing
On the surface, payroll processing seems fairly straightforward.
You pay the employees, the payroll company handles taxes and filing (for a fee), and everyone is happy. But payroll processing fees have a way of accumulating and compounding over the years, especially if you’ve been using the same provider for a long time.
Typically, payroll providers charge a base monthly fee plus a per-employee or per-paycheck fee.
But if you dig deeper, you’ll often find charges for services you didn’t request or need. From year-end processing surcharges to setup fees or tax filing fees in states where you don’t have any active employees, we’ve seen it all.
We also find lots of savings opportunities with businesses that have either grown or shrunk since initially setting up their payroll agreement. You might be paying extra for services that would be included in the next tier up, or you could be overpaying for enterprise features that you no longer need.
One thing that’s really beneficial to your business is that the payroll processing market has become increasingly competitive in recent years. So your provider will want to keep your business and will be willing to make concessions if you know how to ask.
7). Telecom Services
Business phone and internet services aren’t as straightforward as they were years ago. Providers intentionally make the billing complex, and they count on you not understanding your invoices enough to question charges.
There are so many different ways to set up your business phone system now, too — making it even more complex if you’re not sure which setup is the most cost efficient for your business.
- Traditional landlines
- Cloud-based VoIP
- Virtual phone systems
- PBX phone systems
- Hybrid phone systems
- All-in-one business communication suites
In addition to these options, you’ll also have to choose whether you want a hosted on-premises deployment. And the best option for you based on cost and features may not necessarily be the best option for another business.
Beyond the base service charges, you’ll also need to factor in equipment (desktop phones, headsets, adapters, etc.).
We find that most businesses can save money by using a VoIP solution for a fraction of the cost compared to a legacy phone service and get better features.
But even if you have a modern VoIP solution, we see subscription creep here as well. Your provider will onboard you at a promotional rate, then raise prices as soon as they have the chance.
This can really get out of hand if you’re not actively on top of your contract and negotiating the best possible terms at every renewal.
Final Thoughts
These seven business expense categories represent tens of thousands of dollars in annual savings for most businesses. Larger operations can literally achieve six-figure savings every year.
Can you pay less rent by moving to another facility? Probably. But how much would the move cost you in downtime, setup, productivity, and potentially lost business? Can you cut your staff by 10% to save money on labor? Sure. But don’t you need those employees to operate your company at a high level?
Businesses that control their costs the most effectively aren’t necessarily just focusing on their most expensive categories.
It’s these middle-of-the-road expenses, like waste hauling, payment processing, SaaS, and insurance where the real savings can be uncovered. And in many cases, you don’t have to switch providers or adjust operations. It’s just a matter of identifying where you’re overpaying and knowing how to ask for a reduction.
Start with one category. Audit it thoroughly, negotiate better terms, then move to the next.
If you need help with this process, contact our team here at The Cost Guards for help. We’ll audit your expenses on your behalf and negotiate savings directly with your current provider.