Wouldn’t it be nice if there were a switch to freeze costs while sales kept flowing? There isn’t. Rent still comes due, suppliers still raise prices, and that software subscription you forgot about still renews every month.
To cut business expenses without hurting growth, start by separating fixed costs from variable costs, so you know what you can realistically change. Then work through six areas: fix inefficient workflows, cut spending that doesn’t support revenue, review your mix of contractors and employees, benchmark against your industry, question long-standing assumptions, and tighten how you buy and pay. The aim isn’t to slash everything. It’s to stop paying for things that don’t earn their keep.
Why are business expenses so hard to control right now?
Because costs keep climbing. Rising costs were “by far the top financial challenge” for small employer firms in 2025, according to the Federal Reserve’s Small Business Credit Survey. Imports are part of the squeeze. Of firms that source inputs from abroad, 84% said those inputs now cost more.
When costs rise faster than prices, margins shrink. For small and mid-sized businesses running on thin margins already, controlling expenses isn’t optional. It’s how you protect cash flow.
What’s the difference between fixed and variable costs?
Before you cut anything, know what kind of cost it is. Cutting the wrong one can hurt operations without saving much.
Fixed costs stay the same no matter how much you sell or produce. A $1,000-a-month warehouse lease costs the same whether you ship 10 orders or 10,000. Common examples:
Rent or mortgage payments
Salaried staff
Insurance
Loan repayments
Most software subscriptions
Variable costs rise and fall with activity. A furniture maker spends more on wood in a busy month and less in a quiet one. Common examples:
Raw materials and inventory
Hourly wages and contractor fees
Shipping and packaging
Sales commissions
Card processing fees
Some costs sit in between. Utilities, for example, usually have a fixed base charge plus a variable part based on usage.
Variable costs are usually easier to adjust quickly. Fixed costs take longer to change, but cutting them often brings bigger, lasting savings.
6 ways to freeze business expenses
1. Fix workflow inefficiencies
Waste often hides in everyday processes. Three people ordering office supplies separately instead of one bulk order. Landlines nobody answers. Invoices processed by hand, one at a time. Each one is small, but together they add up.
Map out your key workflows, especially those that drive variable costs, and look for duplication. Automating repetitive admin, like bill entry and payment, is often one of the fastest wins.
2. Cut spending that doesn’t support revenue
Understand how your business actually makes money, then look hard at every cost that doesn’t contribute to it. Ask of each expense: if we stopped this tomorrow, would revenue or customers suffer? If the honest answer is no, it’s a candidate for cutting.
Recurring software is a classic example. Review every subscription at least twice a year, and cancel or downgrade the tools your team has outgrown.
3. Review your balance of contractors and employees
There’s no universal right answer here. Contractors offer flexibility, and you pay only for the work you need. Employees bring continuity, institutional knowledge and often lower hourly costs for full-time work. If contractor bills or benefit costs are climbing, a quick cost comparison of each role can show where the balance should shift.
4. Benchmark against your industry
How do your costs compare with similar businesses? Industry associations, trade publications and peer networks often share typical spending ratios for things like rent, payroll and marketing as a share of revenue. If you’re well above the norm in one category, that’s where to dig first.
5. Question long-standing assumptions
Some of the biggest savings come from asking why you do things the way you do. Why this supplier? Why this material? Why this location? Is it what customers want, or just habit?
These questions can be uncomfortable, especially for costs you’ve always treated as fixed. But a different supplier, a smaller office or a hybrid working setup can unlock savings that small tweaks never will.
6. Tighten how you buy and pay
How you spend matters as much as what you spend on. Set clear approval rules so larger purchases get a second look. Time marketing spend to your busiest seasons rather than spreading it evenly. Keep inventory counts current, so you don’t reorder stock you already have.
Then look at how you pay. Paying bills early drains cash you might need. Paying late triggers fees. With Forwardly, AI bill capture pulls in bill details automatically. Approval Workflow makes sure larger expenses get signed off, and Bill Auto Payments pays each bill on its due date, not before. If your vendors are on the Forwardly Network, bank payments between you are free.
See every expense clearly
You can’t control what you can’t see. When bills and payments sync automatically with your accounting software through 2-way sync, you always know what you’re paying for, when it’s due and whether costs are creeping up.
On the other side, getting paid faster gives you more room to manage costs. Customers can pay you by ACH, card or instant payment, with instant payments landing in about 60 seconds. For more ways to protect cash in a tough stretch, see our cost-saving strategies for business crisis management.
Spend on purpose
Freezing expenses doesn’t mean freezing growth. The businesses that manage costs best aren’t the ones that spend the least. They’re the ones that know exactly what every dollar is doing. Curious what payments would cost your business? See Forwardly’s pricing. There are no monthly fees, so you only pay for what you use.
By:
Jane Ingram
Published
