Reducing Business Costs in 2025: A 3-Step Checklist

• Long-term resilience
• Prioritising smarter spend management
• Improved operational efficiency
• and more flexible business models capable of withstanding future uncertainty.

If you’re looking to reduce your business costs in 2025 without compromising growth or service quality, we’ve put together a practical three-step checklist to help you get started.

1. Review budgets and income

Know your business expenses

Blindly cutting business costs could have much deeper and more adverse consequences than intended. Start by taking a good look at your expenses over the last 6-12 months and identifying all variable spend. These costs can include:

• Donations or other discretionary spend
• Employee and customer gifts (holiday chocolates, “get well soon” gift baskets, etc.)
• Optional employee training (non-essential language courses, vocational training not directly related to an employee’s work, etc.)
• Marketing costs (booths, fairs, etc.)
• Variable salaries (e.g. commissions on sales)
• Travel expenses

Some “variable” spend, such as an employee’s commission on sales, can’t be cut, but it’s worthwhile putting it all on the list for visibility.

An expense management system makes identifying and listing these categories of variable spend a much faster and easier task with the help of reporting. The system lists the categories and their associated spend is easily accessible, ready for analysis.

The important thing to remember here is that no expense is too small to be investigated, and every expense is worth examining.

With this spend data in hand, executives can more easily go about the task of deciding which costs will have the highest impact when reduced, while causing the minimum negative effects to the business.

Ensure you are budgeting with up to date data

Consider multiple scenarios and whether you must cut costs you rather wouldn’t (such as laying people off) or if you can make the numbers work differently. 

Why not try an underrated way for SaaS companies to increase income:

SaaS companies often have a yearly indexation clause, which isn’t always applied. If this is the case in your organisation, consider reviewing older contracts and enforcing those indexations where possible.

For example, contact suppliers you’ve worked with for a long time. They may be more willing to offer you a discount if this will help your company remain a loyal customer.

• Identifying these costs and aggregating the data is easy with an expense management system.
• You can use those numbers to your advantage when negotiating with suppliers to ensure the best possible prices, future-proofing your business a little bit more.

Create a “best case” and a “worst case” financial forecast

Knowing what can be achieved in good times and in times of crisis will allow executives to plan accordingly based on which way the numbers are tilting.

In “worst-case” scenarios, expectations both within the company and from customers must be addressed and revised.

This may mean reducing customer service hours and using AI chat bots to answer common support questions.

Part of your forecasts should also include at least one “rebound” plan to ensure that employees and the business are ready to roll once the economy picks up again.

Whatever the rebound means for you, make sure you have a realistic strategy in place and that it’s one you will be comfortable rolling out quickly when the time comes.

2. Balance cash flow with business activities

Having a comfortable and reliable cash flow is essential when the economy isn’t doing so well, especially for newer or smaller businesses which may not have access to credit lines or built up their reputations with creditors yet.

A few simple ideas to ensure adequate cash flow include:

• Carefully review personnel expenditures such as schedules and the variable costs mentioned earlier.
• Institute or maintain remote working policies to lower costs for travel, supplies and other utilities.
• Defer new hires unless they will have a direct and immediate positive impact on your income.
• Cancel or reduce non-essential projects and contract work with freelancers (after cautiously reviewing agreements and termination clauses).
• Comb through all service contracts, cancel non-essential services and defer renewals wherever possible.
• Have honest discussions with your vendors and suppliers about the potential for delayed payments and try to negotiate lower rates.
• Shop around for better deals. Now is the time to look around at what other vendors offer and maybe switch to one with better rates, better service, or extended payment delays.
  
  

Access to up to date and accurate data is key in ensuring proper decision-making. Easily identify and analyse spend categories and vendors with the help of your expense management system.

Centralising spend data in an expense solution allows for fingertip access and strategic management choices.

And while we don’t recommend rushing into cost reductions, speed is of the essence when future-proofing a business for difficult times and easy access to correct data is a significant contributor.

3. Reconsider business activities to help with spend management

Consider cancelling or postponing major plans such as an office move, a rebrand, a refurbishment, or any project with substantial costs and no immediate return on investment.

What this looks like will vary for each organisation. It could mean pausing an order for new machinery or IT equipment. Perhaps it’s taking a closer look at whether new facilities are still justifiable, especially with a smaller on-site workforce or an ongoing shift towards remote and hybrid working. It might even mean choosing not to attend a roadshow or trade conference for the time being.

Explore cheaper alternatives

An example could include improving existing processes. If traveling sales people is a growing cost, consider doing lead generation remotely.

By exploring more cost-effective alternatives such as cold email outreach. This online sales strategy enables businesses to identify, segment, and engage with their target audiences remotely, while reducing travel expenses and continuing to build a healthy sales pipeline.

"Not now" doesn't mean never

Whatever the high-cost items are in your budget, it’s worth delaying them during periods of financial uncertainty, or until you have a clearer picture of what lies ahead.

These changes may be difficult for employees and other stakeholders, but they are often necessary steps to safeguard the future of the business. Not now doesn't mean never

Mobilexpense: expense management you can count on

Your expense management solution can (and should) centralise more than just travel expenses. With Declaree by Mobilexpense, managing expenses doesn’t have to stop at travel claims.

It’s a straightforward way to bring together all kinds of employee-related costs in one place, from corporate card payments and mileage to things like fuel cards, mobile phone subscriptions, and even remote work allowances. Whether the expenses are one-off or recurring, having them centralised makes tracking and reporting much simpler.

This level of visibility helps teams stay in control of budgets, spot trends early, and manage cash flow more confidently, without adding unnecessary complexity to anyone’s day.

Talk to one of our experts today to find out how you can reduce costs and save time with smart expense management.