Pay attention to storage costs and ways to reduce them

Reducing the cost of storage — especially the expense of stockpiling operational records, inventory, and raw materials — can be a real challenge for any business. Dilemmas abound: What records should be kept and for how long? When and how should the firm dispose of obsolete inventory? Should on-site or off-site storage be used?

Consider the following suggestions for reducing your company’s storage costs.

  • Records management. A well-thought-out records retention schedule, especially when paired with reliable software, can help ensure that a company doesn’t incur unnecessary storage costs. Relatively inexpensive computer applications can be used to organize files and alert staff when it’s time to dispose of specific records in accordance with company policy. By conducting routine file audits you can even ferret out unneeded records before they’re sent to storage. (Just be sure to retain any paper documents that may be needed for legal, tax, or regulatory purposes.)

    Some businesses choose to reduce storage costs by creating digital scans of their important documents. Though initially time consuming and labor intensive, the process of scanning documents provides the added advantage of improved access to archived records. Searching a well-organized database from the comfort of your office beats walking the aisles of a dusty warehouse in hopes of finding some long-lost document.

  • Dealing with obsolescence. Businesses shouldn’t pay year after year to store something that may never be sold. A prudent manager will track outdated inventory and ensure that it’s discounted for quick sale or moved — temporarily — into storage. Paying for warehouses filled with obsolete products and raw materials is a drain on revenue. So it’s important to pay attention to inventory. The time may come when stored inventory needs to be hauled to the nearest recycling station or sold via an online auction.
  • On-site or off-site storage? Having reached storage capacity at your current site, offsite solutions may be the only option. But sometimes a little creative management can yield great results and reduce the need for space elsewhere. For example, you may discover open racks that can be used to store supplies or inventory in a smaller (and less expensive) space. If you opt for off-site storage, be sure to negotiate a contract that’s to your advantage. All fees should be itemized, exit fees should be minimized, and terms and conditions should be spelled out.