Definition of Cost Control

Definition of Cost Control

Definition of Cost Control

practice of managing and/or reducing business expenses is cost control. Cost controls starts by the businesses identifying what their costs are and evaluate whether those costs are reasonable and affordable.

(Then, if necessary, they can look for ways to cut costs through methods, such as cutting back, moving to a less expensive plan or changing service providers. The cost-control process seeks to manage expenses ranging from phone, Internet and utility bills to employee payroll and outside professional services) 

VMeaning of Cost Control :

(There is no exact rule or definition of cost control. The term, cost control, implies the usage of policies and internal rules that help you to cut the cost of a particular management process) Cost control methods target the reduction of cost, and maintenance of quality and qyantity of a particular production process or service generation. 

VMethods of Cost Control :

Any business or corporation has to encounter difficulties, which are practical, financial as well as technical. The ones that survive these difficulties live to tell their stories of sucçess)The following are some simple successful methods to control costs

 Vi. Review and Modify Business Model : 

There is a great, economically and commercially successful business model, that is used to lay down the foundations of any company. The business model must be however subject to small and big changes. It means as a manager, you should subject the business model to changes according to your competitors actions and markets status. By the term change, Ialso mean that you should be upgrading and improving all possible business operations. You need to come up with new process and procedures to reduce costs. . 

Daily Updates :

 One of the best ways to start controlling costs is to have daily updates of production, all possible long and short-term expenditures (Divide all these expenditures, even the ones such cost of machinery or insurance, and sales, by the number of working days. This will give you a concrete figure of the total amount that has been spent Similarly after sales of your goods or services, you may also divide the total amount of sales by the number of working days) This will give you a micro figure about the daily expenditure and sales. It will definitely help you to zero down on all possible cost problems that you incur k.

 Uniformity :

 Cost control management is all about deriving the best outputs in a least cost. Hence, set-up a highly efficient and specialised stores department which will oversee all purchases You may also take a risk and make long-term agreements regarding the quality and quantity of baterials that are being supplied to your manufacturing process)This uniformity willensure a timely , cheap and assured supply of raw materials. 

A Time Planning:

Time is money! Well divide the amount of wages that you give out with the number of work hours per month. Explain to the employees per hour expenditures that you Incur nuvence the necessity for time management. You may also install good cost control systems to beln the finance and accounts department your employees to manage their work hours wellJA cost control software will also work wonders in In order to have a set of good cost control techniques at your disposal, you need to think creatively and effectively. You will also need to think about all the dimensions of expenditures, such as time dimension, long and short-term expenditures, per capita wage expenditure etc You can also consider all macro and micro costs. For example, the cost of running one team in comparison to the cost of all teams, or the cost of running one team compared to the revenue generated by the same team.