Budgeting Your Warehouse Expenses for Q4

November 11, 2020

A warehouse that is financially successful and stable is typically one with a preplanned budget. While mistakes and poorly planned estimates can have a snowball effect and drive costs sky high, a properly managed warehouse budget can drive results throughout Q4. 

As Q4 is here, warehouse managers can plan out their budget to ensure success in this next quarter to close out the year. Taking the time for an accurate warehouse cost calculation can help implement standards to save warehouse operating costs and drive growth for the upcoming months - and the new year. 

How to Determine Your Warehouse Budget Needs for Q4

When establishing your warehouse budget, needs of the next quarter must be factored in. Determine your operating costs and goals for the upcoming months so you can make an educated decision about your budget. Doing so will help your warehouse monitor operating costs so as to stay under the allocated amount set aside for the quarter’s budget. 

Take Inventory of Your Warehouse Equipment

Budgeting for the next quarter must take into account the amount and condition of your warehouse equipment. To have an accurate picture of your warehouse inventory, you need to know:

  • How many forklifts, batteries, chargers, and pallet racks are there?
  • How many dock doors do you have?
  • Are there additional pieces of equipment, such as door seals or shelters, installed?
  • What is the condition of your warehouse equipment?
  • Will they need servicing? 

Knowing the amount of inventory you have will give you a better understanding of where your warehouse stands in terms of equipment. The cost of warehouse service will depend on your amount of active equipment; service upkeep on two forklifts is significantly less than if you had twenty.  Most warehouse equipment needs regular servicing  to keep it in prime working condition. Improperly serviced equipment can result in failures, which increases maintenance costs and can cause dangerous situations for the employees manning the machinery. For instance, if forklift batteries are not replaced or the proper battery charging practices aren’t being followed, issues like excessive battery sulfation or shortening a battery’s useful life can occur. 

Look at Historical Data

Examine past records and receipts when determining your budget to estimate operational costs and repairs. Check how often you were conducting planned preventative maintenance last quarter and how many times you still needed to conduct warehouse repairs. This data can help determine if you need to budget for more frequent preventative maintenance checks for Q4. 

Historical data can also give you a picture of how much your warehouse has spent on preventative maintenance and repairs in the past months. By using this data to predict your future spending, you can be proactive about predicting your future warehouse costs and allot your Q4 warehouse budget to cover those estimated expenses. 

Consider Your Growth Goals for the Upcoming Months

Take into consideration what goals your warehouse has for Q4 when planning your budget. Any growth goals will need to be factored in so the right amount of money is set aside. For instance, if your warehouse is to be expanded in Q4, then you will have to estimate those costs. An expanded warehouse must not only include money for construction costs, but also new inventory, pallet racks, and other warehouse equipment. Perhaps you’ll need additional employees, which means the budget must include their pay. 

Additionally, if you purchase more forklifts, make sure to include future equipment servicing into your warehouse budget needs so that they are properly cared for.

Tips for Making the Most of Your Q4 Warehouse Budget

Whether you have a tight budget or not, making the most of your warehouse budget will help ensure that your warehouse operations are efficient and continually maintain a high level of productivity while saving costs. 

Use Rental Warehouse Equipment 

Renting warehouse equipment as opposed to buying new models can save your warehouse from spending on big up-front costs. The immediate costs of rental forklifts are usually a fraction of the costs of what it would be to buy new equipment. Rental equipment can also satisfy temporary needs so there is no need to pay for brand new equipment that will sit idle and lead to a waste of warehouse space once the busy season passes.

Leverage Used Forklift Batteries

Warehouses operating with a tight budget should consider leveraging the price benefits of used batteries to their advantage. Buying used motive power batteries reduces up-front costs for brand new batteries to free up the warehouse budget for other expenses. 

While renting used forklift batteries may seem like an attractive option for some warehouse managers, others see a greater potential within buying pre-owned industrial batteries if they plan on using the batteries for an extended period of time.The total cost of ownership overtime can often be lower than the cost of renting motive power batteries if warehouses rent batteries long enough. 

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Stay on Top of Preventive Maintenance

Many warehouses drain their budgets and suffer a loss of revenue from having unsafe preventative maintenance practices. Without preventative maintenance, employees and equipment are put in dangerous positions. Equipment that is not serviced regularly can become worn; damaged storage racks and faulty forklifts can transform from essential equipment to safety hazards that prevent employees from effectively carrying out their operations and increasing the risk of injury.  

A preventative maintenance schedule ensures that you are preventing bigger issues than occurring unexpectedly in the future, such as emergency repairs. Creating a preventative maintenance checklist for your motive power, storage and handling, and dock and door operations ensures that any maintenance checks are conducted as efficiently as possible.


Download The Guide

If you are in need of any warehouse services, or guidance as you form your warehouse budget, allow Southern State Enterprises to help. We provide an extensive, comprehensive list of warehouse services that are all performed by our expertly trained technicians. If you’re looking for a warehouse budget that will optimize your operations, contact one of our representatives today and learn more.

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