Financial crises are built into the economic system that keeps our world ticking over. The only thing that's certain is that it will come. Part and parcel of these periods is that companies less able to compete are left by the wayside. Only the strong are left to survive. With the global recession we are now living in set to be one of the worst in a generation, it's inevitable that there will be alot of companies going belly up.It's never been more important to stay one step ahead of your competitors.

Reducing Costs
The first question any business will ask in times of recession is "what can I afford not to spend money on". The most common reactions are job cuts, reduction in marketing and advertising spend and cutting back on direct costs. But there is a major downside to cutting costs in this way.There's always a detrimental effect to the business. This means a shrinking of your sales and turnover, as well as other potentially negative effects like reducing the morale of your staff. This is not a revolutionary idea by any means. Usually, unless you are completely clueless, you are aware of these risks and do your best to manage them in advance. But what if there was a way of cutting out expenses that REALLY are unneccesary, without adversely affecting your business at all?

Burning Money
You can pretty much guarantee that most businesses will have a certain amount of wastage in their expenditure. This, to an extent, is normal and you can't completely avoid it. But a lot of this comes from accounting inefficiency, especially when it comes to costs related to your fixed assets – such as equipment, machinery, computers, vehicles, and so on. You can keep these expenses to a minimum by identifying where the leaks are taking place. Best of all, these savings do NOT result in any reduction in output. Below are a few of the most common ways in which unnecessary expenditure on assets occurs in organisations:

• Inaccurately measruing depreciation value on assets. This is a common oversight that can result in overpayment of taxes.
• Equipment going walkabout. The larger the organisation, the more of a danger this can be, unless you have a decent asset tracking system in place.
• Paying too much for your insurance premiums due to incorrectly valued equipment.
• Buying unneccesary equipment. Many organisations buy things they don't need because they haven't got the right information on what they already have.

You'd be forgiven for thinking that these are small and inconsequential factors in the grand scheme of things. In fact, that's how most businesses think. When you add all those small costs, however, you end up with a potential lifesaver when margins are as thin as they are now. Just getting the right asset accounting in place could mean the difference between success and failure in 2009.