Three Ways Companies Lose Money - And Don't Even Know It

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Companies need to make money in order to survive long term, and many established organizations have developed ways to achieve this on a consistent basis. However, just because they have a positive cash flow doesn’t mean that they’re operating optimally; in fact, there are ample ways for organizations to lose money without realizing it, and if you’re not careful, your organization can easily miss out on opportunities to invest in your company’s growth. 

There are some ways companies lose money that are obvious, like high turnover or partnering with the wrong vendor. But here are three key ways that your company may be spending money unnecessarily: 

Lack of Clarity  

Modern companies have access to tons of information, both for internal operations and to better connect with their customers. However, in the midst of this flood of information, it can be easy for business leaders to lose sight of fees and paperwork that can have a serious impact on your organization’s bottom line. 

Speaking from a strictly financial standpoint, organizations often spend more money than is necessary on hidden vendor fees and poor invoice management. Especially in larger organizations, it’s not unusual for vendors to provide complicated contracts with fees hidden deep in the text, and that can cost your business opportunities to grow. Telecom firms/carriers are notorious culprits in this area. 

Paying for Duplicates 

Aside from spending too much on correcting invoices, companies can also run into problems when purchasing new technology to run their businesses. 

Investing in new technology is something every organization has to do at some point. In fact, it can lead to increased efficiency, revenue, and scalability, which can put your organization ahead of the competition. 

However, it’s exceedingly common that an organization invests in redundant systems for telecom, IT, or operations that could be combined or eliminated if they were fully understood and implemented. For example, with many modern tools being based in the cloud and relying on SaaS components, you could be paying more for your cybersecurity software if you didn’t realize that you already had access to robust protection under one of your existing agreements. 


If your organization is fully utilizing all of its software, then you’re probably operating at a high level of efficiency, but even the leanest organization sometimes has back-end processes that can be optimized further. Most often, these areas of improvement lie in the administrative space, but if your organization is managing its own IT environment without having the right resources on staff, you could be diverting valuable resources away from growth opportunities. 


Organizational inefficiencies occur in the best-run companies, and though they don’t always pose an existential threat, those wasted resources can inhibit growth and create serious issues with a company’s bottom line. 

A key way to ensure your company is operating at peak efficiency is to verify that every aspect of your investments are fully implemented and the processes are clear, but sometimes it’s hard to determine what’s going wrong on your own. In that case, there’s a ton of value in working with a partner (like Prelude Solutions, in the case of telecom spend) to ensure that your investments aren’t being wasted.