Business Tips Finance

Does Working Remotely Save Costs for Small Businesses?


Since the Covid- 19 pandemic, conversations around telework and maintaining a remote workforce have taken center stage in business circles. With several employers and business owners searching for various means to remain afloat and profitable, many are faced with the decision of whether or not to allow their onsite workers to work from home, post-Covid-19.

The hesitancy by most business owners is evident all around the global business space. With many proven advantages and benefits that accrue to employees who work remotely, the key question remains whether companies stand to benefit equally from the same. For most employers, many fear that such an arrangement may be detrimental to their businesses in the long run. However, several pieces of research have been undertaken on the same and the reports are pleasantly surprising.

Here are some of the ways small companies can save on costs when their employees work from home:

Monetary Benefits

1. Reduced Utility Bill Expenses

According to Forbes, a business can save up to $ 11,000 a year per employee, if the employee works remotely. This is because a remote workforce hardly (if at all) utilizes any utilities present in the business premises. Air conditioning, room heating, telephone, computer, faxing and electricity use drastically reduce. The cumulative effect has a drastic reduction on the recurrent daily running expenses of the business.

2. Reduced repair and maintenance costs

Additionally, with little to no use of these utilities, companies can cut back on their repair and maintenance cost expenses. Most equipment failures are primarily induced by the repeated use of the appliance, however, with a remote workforce, onsite appliances will last longer as they are hardly used.

3. Reduced Business Premise Expense

Maintaining a remote workforce will allow companies to operate in smaller premises, which in turn reduces rent expenses. The smaller premise will only house a few of the employees whose job descriptions or roles mandate them to be onsite. This will also reduce the need of opening up several physical branches all over the state as nearly all the services of the organization are provided online by a remote workforce.

4. Reduced Payroll costs

With the option of remote working, researchers have shown that a considerable number of employees are more willing to work remotely at a lesser remuneration than stay onsite and receive their ‘usual pay.’ Therefore, with a remote working arrangement, small businesses can benefit from the reduced payroll expenses of its employees.

Non- Monetary Benefits

These benefits have indirect impacts on the running expenses of the company and by extension its profitability.

1. Increased productivity

The flexibility and convenience of working from home facilitate greater productivity amongst employees as compared to those who work on-site. Remote working affords employees a level of independence which fosters initiative and boosts overall performance. It allows them to perform their work projects and various tasks peacefully and at their own pace. Further, the duration of time spent on the highway or railway commuting to work can be channeled to the work projects to deliver the tasks by the stipulated deadline. This increases the profitability of the business.

2. Higher employee retention

Some employees would prefer a job that has an option of remote working as opposed to one that is limited to an onsite working arrangement. Due to this, employees are likely to change jobs to those which are more flexible and afford greater convenience such as working from home. Having a remote working option will minimize recruiting costs as employees will opt to stay.

3. A wider pool of skill and talent

Where a company allows an offsite workforce, it opens itself up a wider pool of numerous potential employees from all around the world as opposed to merely those within the business locality. This helps the business cherry-pick and recruit the best applicants who have skill, experience, and talent in the given field, thereby increasing the profitability of the business.

4. Access to different geographical and demographical markets

Having a remote workforce working in various parts of the state will increase the business’ presence in that locality. This may just be the way to break into coveted or untapped markets, as opposed to physically setting up an office in those localities, which may be quite expensive.

5. Increased business operation hours

With remote working comes various time zones that can be harnessed in a manner to profit the business. Employees reporting to work in a region with an earlier timestamp may do so and leave once they clock the required working hours. Similarly, employees residing in regions with a ‘late’ timestamp can clock in, later on, work and leave later in the day. This arrangement may increase the hours a business remains open from 8 am-4 pm to 8 am – 8 pm, with little to no additional costs and without any employee working overtime.

Financial Hazards of Remote Working

Conversely, the immense benefits a small business can gain from remote working is not full proof. Several unique challenges are posed in this type of arrangement namely:

  1. Increased Tax implication- some states mandate companies with a given number of employees in their jurisdiction, to register themselves with that state and incur a certain % of corporation tax. Stiff penalties are stipulated if the company defaults in registration or payment of the tax.
  2. The high initial cost of procuring the necessary software and collaboration tools to support a remote workforce – especially if you have many employees.


Companies do stand to benefit from a workforce that works from home. However several considerations ought to be taken into account before deciding to initiate such a plan post-Covid. Key among them are financial and tax considerations.

Experienced Chatswood accountants understand the changing business and employment landscape and are well able to advise, plan, and walk with their clients every step of the way to actualize customers’ business goals.

Leave a Reply

Your email address will not be published. Required fields are marked *