Business Advice | Blog

Could a Working Capital Loan Actually Minimise OpEx?

By B Cressy


March 19, 2024

The beginning of March heralds the start of the new financial year for many. The SONA and budget speech have been delivered, the new tax year has begun, and everyone is starting on a clean slate. That makes this the perfect time to perform a little spring (autumn?) cleaning around your operating expenses, especially as some accounts drop off and you’re preparing for new ones to come flooding in. Our top tips? Prune unnecessary expenses and consider a working capital loan if you need one. 

Operating expenses vs. overheads

Quick recap: operating expenses (OpEx) are fluid costs in the business associated with output. If your business were to stop production, which costs would be the most greatly reduced? Those are your operating expenses. 

On the other hand, overhead costs are generally fixed expenses that are unaffected by the productivity of the business and cannot be avoided. This includes things like rent, utilities, and insurance payments. 

Because OpEx is more flexible, there tends to be more room in this area to find more comfortable margins. Here are our top five tips for reducing your operating costs just in time for the new business year. 

5 Tips for Reducing OpEx in 2024 (Including a Working Capital Loan) 

Tip 1: Go paperless 

Using paper is so 2003. In the era of SaaS and cloud technology, many businesses are opting to move their processes online, which greatly reduces costs associated with the purchase of paper and stationery, not to mention the hours spent on lengthy manual processes. Plus, many accounting software solutions automate tasks like reconciling bank transactions and sending invoice reminders, easing the mental load and improving accuracy all around. 

If you haven’t already, we strongly recommend migrating your business’s accounting system to a digital accounting platform like Xero, Sage or Quickbooks. While Bridgement also reviews PDFs of financial statements, we can plug directly into your accounting software to efficiently evaluate the terms of your facility with us. Just another reason to use accounting software! Oh, and did we mention that our application process is 100% paperless? 

Tip 2: Do a deep clean of your accounts 

Time to review all the little monthly expenses that are adding up to a big drain on your company’s resources. Got a pricey subscription for a software that barely anybody uses? Cancel it. Got a long-standing account with a supplier who just isn’t offering as good a deal any more? Find a better one. 

Ending relationships like that can feel risky, but it may be acting in the best interests of the business. Besides, you don’t have to say goodbye forever; just goodbye for now. 

Tip 3: Negotiate with your suppliers 

Before you end a supplier relationship, see if they’re open to negotiating your terms. You might be surprised at how willing your vendors are to accommodate you, especially if the relationship is mutually beneficial. Remember, closed mouths don’t get fed — it’s better to ask and find out if you can negotiate some wriggle room. 

Tip 4: Consider tax incentives 

In our article about The Best Financing Tips for the End of the 2024 Tax Season, we mentioned employment tax incentives (ETI). ETI reduces the cost of hiring employees who earn between R2000 and R6500 per month by sharing the cost of PAYE with the government (without affecting the salary of the employee). You can read about ETI in even more detail in this article

Tip 5: A short-term working capital loan is always an option 

If you’ve pruned all the OpEx you can and you’re still seeing a need for cash flow management, don’t worry about it. All you need is fast, flexible access to a working capital loan that keeps cash flowing until payments or the flood of new accounts comes in. 

When it comes to cash flow funding for growing businesses, speed is of the essence. That’s why Bridgement’s online application process only takes 2 minutes, and access to up to R5 million in business finance happens in 24 hours or less. 


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