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Transcript of Expence Control
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BY N. Manikandan
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Ways to Increase Profit
To Increase Profit.
Cuttingdown
expenses.
Rising theprice
Increasingthe sales
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IntroductionIn this Competitive Environment it is tough to increase thesales and increase the profit so by way of cutting down the
cost it is quite easy to increase the Profit.
Most of the Top Rated Companies are following this way to reduce their wastages and cut down theirunwanted cost.
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Utilities
If the reduction is neededquickly, expenses cut first
will normally be those thatare not fixed or directly tied
to production.
It is not a good idea todrastically reduce expensesthat produce the company product or service without
careful evaluation.
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Different Approaches.
A company
can:
Reduceexistingexpenses
Eliminateunnecessary
expenses
Replacehigher
expenses with lowerexpenses forsame items
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key areasRaw materialprocurement
Logistics
Warehouseand Stores
ManufacturingProcess
Energy, fuel & Water
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Employee Participation
Encourage employees to submitcost cutting ideas regularly andreward them with recognition
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Ways to Control it
Controlling Expenses is equally importance as far as profitability is
concerned.
GeneralLedgerManage
ment
Through
Budgeting
Through
Forecast
ing
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Budgeting & ForecastingIt is a tool that helps control operating Expenses.
The focus is basically a predication of future income.
Once the Budget is created, Expenses should bemonitored so that expenditures are kept within thebudgeted limits.
If any Expenditures are exceeded, further analysis todetermine the root cause should be undertaken.
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Importance
Sometimes it seems that acompany gets one set of
expenses under control, andin the meantime, another
area of the company beginsexperiencing cost overruns.
It is a never ending battle tomaintain company
profitability.
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Need for Expenses Control
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Needs
To increasecompetitiveadvantage
Create cashfor reinvestin research
anddevelopment
Reducemanufacturing costs to
stay competitive
Lower costsof service in
order toprovide
additionalservices
To preventreduction
inemployeebenefits
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Conclusion Companies that arelosing money, need to increase profits, ormust become more
competitive need tocut expenses in orderto succeed.
Knowing how toimplement effective
cost reductionstrategies can be thedetermining factor in
the survival of abusiness.
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