Driving the bottom line through profitable revenue growth likely is the objective of virtually every company. This should be the number one focus, of course. If you’re not growing, you’re dying. But companies also need to focus on controlling costs. Without constant vigilance, companies can find themselves in an uncompetitive situation with bloated overhead. The episodic slashing and burning that then becomes necessary can significantly damage a company. These efforts risk producing exceptions on the financial statements, drive “one-time” charges, and hurt company culture. The better way to maintain the appropriate cost structure is to control them in a sustained fashion. Here are 5 ways to control costs.

1) Renegotiate all contracts annually. For whatever reason, American businesses presume that multiple year contracts will result in lower costs. Maybe sometimes, but not always. A smart company policy is not to have the life of a contract exceed one year. This forces annual bidding or at least renewal discussions with the current suppliers. Almost always these discussions will result in lower cost of goods. A multi-year contract will usually favor the vendor. Of course this is a lot of work. But it sure pays out.

2) Ask your customers. Annual planning sessions with customers have many benefits. Naturally these discussions primarily should focus on ways to grow the business. But too often these discussions fail to address costs. By discussing costs holistically up and down the combined supply chains, customers often can recommend ways to reduce costs. For example, how to take wasted steps out of the process, or how to plan jointly to smooth production, or maybe even how to change the product mix to get rid of costly items and replace them with some that are more profitable. Talking to the customer is never a bad thing. But talking