The main methods of enterprise cost control

Introduction: cost is an important economic indicator of the enterprise, strengthen the cost management of the enterprise, not only can increase the enterprise's own profits and the interests of the masses of workers, but also improve the competitiveness of the enterprise.

Methods of enterprise cost control

I. Problems in cost management

From the current situation of the enterprise to analyze, I think there are the following problems in the enterprise in terms of cost management:

(a) the lack of traditional costing

The lack of traditional cost is mainly manifested in the management of the sloppy, cost concept is weak, Internal cost management control is lax, mainly due to the following reasons:

1. Internal factors:

Jiangsu and Zhejiang area of the enterprise, most of the transformation of small-scale family enterprises, the early stage of the enterprise by the reform and opening up and the influence of the external market, the scale of production, rapid expansion of the staff, the owner of the enterprise is more heavy faith in the belief that there is a market for the product and the product has a benefit of the concept of not Emphasis on the management of internal production costs, and therefore ignored the requirements of cost management in the dynamic source.

2. External factors:

After the Ministry of Finance issued the Measures for Cost Accounting of State-owned Enterprises in 1986, it did not formulate the System of Product Cost Accounting of Enterprises until 2014, which also reflects the government's level of contempt for cost management in terms of policy.

Likewise the financial authorities rarely implement checks on the rationality of the cost management of enterprises, and as the most important influence on the operation of enterprises, the tax department uses the implementation of early warning rates, tax burden and other crude tax collection and management system, but also misleads the enterprise's understanding of cost accounting, the system guides the behavior, and this move has weakened the status of the cost management of the enterprise in the management of the enterprise.

3. Lack of cost management personnel:

High-quality cost management personnel is a good cost management and control of the necessary protection, the current cost management personnel is limited to a simple analysis of financial income and expenditure. Such cost management is difficult to reflect the full picture of cost management, and difficult to prompt the enterprise to improve business management.

(ii) pay attention to product costing, ignoring the full cost control?

Most of the enterprise accounting focus on the apportionment of resources consumed in the product manufacturing process, its accounting only on the variable cost part of the accounting, but failed to fully consider the cost of investment, financing costs, and did not take into account the cost of research and development in the early stages of the follow-up marketing, maintenance costs, the result is that a limited number of cost management objects can not cover all the cost of the object, the decision-making based on the control of variable cost is inevitable! Errors.

(C) ignore the investment costs, risk costs on the impact of business operations

Enterprise managers have the impulse to increase the size of the enterprise, resulting in excessive investment projects, due to the large demand for investment, the enterprise's internal financial resources and the relative lack of borrowing from the bank or even private fund-raising has become the main source of funds for the expansion of enterprise investment, excessive borrowing pushed up the financing costs, resulting in greater repayment costs. Over-borrowing has pushed up the cost of financing and caused enterprises to face greater repayment risks.

The pile of investment, resulting in a sharp decline in product prices, the enterprise investment is not yet, that is, facing investment failure. The predicament faced by enterprises in Jiangsu and Zhejiang is largely due to this. Enterprises too much faith in the return on investment, ignoring the cost of investment, the cost of risk has led to the failure of business operations.

Two, improve the cost management recommendations

Aiming at the above problems in the enterprise, the author analyzes, roughly puts forward the following suggestions:

(a) Strategically improve the status of cost management in enterprise management

Cost management in homogeneous competition is particularly important, so in the integration of market resources at the same time, through e-commerce, such as the new type of Therefore, while integrating market resources, we can reduce marketing costs through new business models such as e-commerce, and reduce hardware costs through the division of labor in the industrial chain and collaborative procurement of parts.

This requires raising the status of cost management in enterprise management at the strategic level and raising the status of cost management in enterprise management.

The cost management system provides financial and non-financial information to help companies make effective decisions and thus build their competitive advantage.

(ii) the implementation of dynamic full-cost management mode

Through the traditional cost control means can only reduce some of the non-fixed costs, the cost reduction margin is not much, so in order to reduce the cost of the enterprise as a whole, we must pay attention to the consumption of the production, marketing, capital costs and other aspects. In addition, the enterprise should also through product development, equipment maintenance, staff training and other diversified means to reduce costs.

Expanding the scope of cost management to variable costs and fixed costs, expanding cost management limited only to the production process to dynamic cost management of the entire process of research and development, distribution, etc., and then implementing a modern cost management model based on job cost or target cost.

(C) Concerned about the impact of investment and financing behavior on the operating costs of enterprises

Enterprise investment is an important way for the survival and development of the enterprise, which can make the enterprise funds can be efficiently operated to produce the maximum benefit. And a reasonable capital structure can effectively reduce the cost of financing, blind investment caused by the financing activities will not only increase the operating costs of enterprises, but also affect the normal production and operation activities of enterprises.

Therefore, when investing and financing, we should pay attention to the financial risk factors, pay attention to the negative impact on the operating costs of the enterprise, formulate a reasonable 'investment and financing cost management system, from the overall grasp of the investment and financing behavior on the cost of the enterprise, and pay full attention to the negative impact of the financial risk on the overall operation of the enterprise.

(IV) Reform of the existing cost accounting model

Today's economic globalization, the cost structure of the enterprise has undergone a major change, in addition to the direct materials basically maintained at a certain level, a high degree of mechanization, intelligence makes the proportion of labor costs continue to decrease.

With the accelerated renewal of products, enterprises have invested a huge amount of research and development costs in the early stage, while the perfect marketing, after-sales system makes the late marketing costs, maintenance costs continue to increase, so the cost coverage under the current costing system is low, the content of the costing is relatively reduced, based on the premise of the cost of the management of the effect is also relatively weakened.

Therefore, expanding the scope of cost accounting and implementing an expanded version of the "manufacturing cost method" or even the "full cost method" in the system will improve the level of cost management.

Conclusion

Cost management should include the management of investment and financing costs, fixed cost management; cost management is not only a static analysis of existing data, but also should be the whole process of production of dynamic cost management, cost management process should be extended forward to the R & D stage, and backward extension of the maintenance link.

From a strategic point of view of enterprise cost management, in order to make the enterprise based on the market and maximize the value of the enterprise.