In the wake of the growing economic recession, smart companies are looking at technology to reduce operating costs. As prices fluctuate based on demand, companies must be cognizant of how and where they spend their money. They can no longer rely on manual processes to reduce their business expenditure.

As a viable ERP solution for small-to-medium businesses, SAP Business One or SAP B1 improves business operations and minimizes costs. As an integrated ERP tool, SAP Business One can reduce business costs by collecting operational data from various business functions, including sales, customer service, operations, and accounting.

This blog will discuss the best cost-saving strategies with SAP Business One.

SAP Reduce Business Operating Cost

Expense Reduction with SAP Business One

Through integration, here are some of how SAP B1 can reduce expenses and operational costs:

1. Sales

Manual sales processes result in a massive waste of time and money in any organization. For instance, entering duplicate sales records is inefficient and could be based on old or outdated information.

With SAP Business One, organizations can reduce operational costs and optimize customer experience. Through connected business functions, you can create a streamlined sales cycle for the benefit of your sales team. For instance, sales teams now have real-time access to product information, which enables them to submit accurate sales quotes and proposals.

2. Marketing

In the age of personalized marketing, organizations need real-time insights into customer behavior and sales patterns. SAP Business One enables the integration of sales and production functions through its back-office systems.

Through this integrated approach, marketing teams can create customized campaigns and deploy them across various channels. It means organizations do not have to spend money on “generic” campaigns and advertisements. SAP B1 enables you to spend your money at the right place and to the right audience.

3. Supply Chain

Manufacturing and logistics companies can incur high inventory costs without an efficient supply chain. SAP B1 helps these companies reduce operational costs through efficient supply chain management. They can gain complete visibility into the entire supply chain cycle and identify areas of excessive spending.

Additionally, the supply chain management module in SAP B1 enables organizations to streamline their ordering and fulfillment processes. This helps them analyze supplier and vendor behavior and understand purchase and selling trends.

Besides streamlining these business functions, SAP Business One also reduces upfront costs through its subscription-based cloud offering. Traditional ERP solutions incur significant upfront costs, which makes them unfeasible for small companies. On the other hand, SAP Business One on the cloud operates as a monthly subscription service that provides growing companies economies of scale, which can boost their profits and help them with operational cost optimization.

Next, let’s discuss some of the capabilities of the SAP Business One cost management and accounting module.

How Does the SAP B1 Cost Management Module Help Small Businesses?

Modern organizations, including small enterprises, have cost centers like HR and accounting functions, which can add to their business expenses. On its part, SAP Business One features the cost and accounting module, which allows them to define various cost centres and create accounting reports.

What is a cost center? A cost center is a business division that performs a business function. Some examples of a cost center include marketing, HR, product development, and customer support. A cost center does not generate direct revenues like sales but can help the organization grow and capture every accrued business cost.

With its in-built cost and accounting module, SAP Business One enables organizations to implement budgetary control for each cost center. To do this, you can create a cost center hierarchy in SAP B1 that comprises multiple cost centers in a hierarchical “tree” structure. Distributing the cost data across the hierarchy gives organizations more visibility on their cost structures.

Using SAP Business One, small businesses have better control over their budgets and can overcome the challenges of revised budgets, poor coordination, and conflict between business divisions.

Next, let’s discuss some additional ways SAP B1 customers can reduce operational costs.

Additional Ways of Reducing Operational Costs

Organizations can also reduce their operational costs by optimizing the use of their SAP B1 licenses. On its part, SAP offers over 40 types of licenses priced anywhere between $60 to $7,000. The price differs based on the number of users and user permissions. Additional licensing options depend on the number of transactions performed on the integrated SAP system. This option is more cost-effective for small companies with limited SAP users.

Organizations can manage their licensing costs by choosing the right licensing type, thus reducing their overall business costs. Additionally, they can reduce licensing costs by identifying the following two types of users:

● Inactive Users

Employees or SAP B1 users could leave the job and take up other responsibilities. Without regular audits, organizations could be paying license costs for inactive users.

● Duplicate Users

In small companies, it’s common for a single user to handle multiple responsibilities across business functions, thus requiring different types of user permission. This can result in a user being assigned two or more SAP licenses with different usernames. Organizations must identify duplicate users and reassign their additional licenses to other users to reduce licensing costs.

Besides licensing types and users, organizations could incur high licensing costs due to customer support and maintenance activities. To reduce this spending, they can restrict the support and maintenance to selected SAP users and eliminate the users that do not require these services.

In the next section, let’s examine how organizations can maximize their ROI with SAP Business One.

Maximizing ROI with SAP Business One

In addition to reducing operational costs, SAP Business One enables organizations to maximize their ROI in a shorter period. Here are some effective practices that can help you leverage SAP B1 for maximum business benefits:

1. Integrate an SAP B1 add-on

By installing an add-on like CRM, SAP B1 can help organizations understand their customers and analyze their behavior accurately. With the right add-on, SAP Business One provides real-time information on every business function.

Also Read: How SAP Business One Add-Ons Benefit Your Business?

2. Leverage the Power of Dashboards

SAP Business One provides an intuitive dashboard that can be customized to business needs. With visual dashboards, you can extract valuable business insights, which can improve your decision-making process. Additionally, real-time reports can track relevant KPIs and metrics that indicate organizational performance.

Also Read: How to Create KPIs in SAP Business One

3. Provide Accurate and High-Quality Data

With high-quality data, organizations can enhance the business value of their SAP B1 investment. Among the best practices, standardize the data entry process using templates, reducing the chances of manual errors. Periodic data monitoring using data validation tools can also ensure high quality and accuracy.


Among the leading ERP solutions for small businesses, SAP Business One enables these companies to stay competitive and profitable by reducing operational and business expenses. This blog has discussed some of the successful cost management strategies you can execute with SAP B1 solutions.

Among India’s successful SAP implementation partners, Praxis Info Solutions has a track record of optimizing the implementation cost of SAP Business One for a range of small businesses. Here is a blog highlighting why we are among India’s top SAP business partners.

Are you looking for assistance to leverage SAP Business One to reduce your operating costs? Contact us today.

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