Cost Reduction and Cost Control

Cost Control and Cost ReductionPreparationTasmeer Un Nazirtasmeer786@gmail.comWHAT DO WE UNDERSTANDCost Control and Reduction areStrategic processes and activities that help companies toCut down the incurred costs.Increase productivity and efficiency.Survive competition and gain market.DEFININGCost ControlA processoractivitycontrollingcostsassociatedwith an activity, process, orcompany.Typically includes procedures toInvestigate varianceofactual costsfrombudgeted costsAscertainthe cause(s) of variance, and Realign actual and budgeted costsDEFININGCost ReductionLooking for, finding and removing unwanted expensesIncreaseprofitswithout reducingproduct qualityPeriodic cost reductiondrives making operations efficient and boost profitsDIFFERENCECost Control & Cost ReductionFocus

Cost ControlCost Reductionminimization of wastageminimization of costplanninginnovatingbudgeting,standard budget,variance, & inventory, etc.

new production process, improved plant layout, scientific material handling, etc.DIFFERENCECost Control & Cost ReductionBasis of Application

Cost ControlCost Reductionroutinely applied on a continuous basisapplied when an opportunity is identified offering a competitive advantage for a longer timeDIFFERENCECost Control & Cost ReductionUse of Accounting Techniques

Cost ControlCost Reductionrelies on accounting techniquesnot using of accounting techniquesSUCCESSFULCost ControlFirm should have definite plan of organizationCosts should be collected for each of responsibilityReport should draw managements attentionGood performance should be rewardedProper setting of standardsSUCCESSFULCost ReductionCurrent expenditure in-depth auditData and market analysis Reporting and detailing the findings and recommendationsImplementation of recommendationsMonitoring and implementing improved administrative procedures

AdvantagesCost ControlAchieving the expected return of capitalIncrease in productivity of the available resourcesJob opportunityEconomic use of limited resources of productionAdvantagesCost ReductionReducing overall operating costsImproved management of utility contracts and relationshipsReducing the waste across all departmentsFolks, that is all, seriously!