Cost control of enterprises to improve competitiveness

Cost control of enterprises to improve competitiveness

Cost control is an eternal theme in enterprise management activities. The direct result of cost control is to reduce costs and increase profits, thus improving the management level of enterprises and enhancing their core competitiveness. Here are the details I brought. Please refer to them.

First, the basic meaning of cost control

The so-called cost control refers to a series of preventive and adjustment measures taken by the cost control subject according to various factors and conditions that affect the cost before the production consumption occurs and during the cost control process, so as to ensure the realization of the cost management objectives. It includes six links: cost prediction, cost planning, cost control, cost accounting, cost assessment and cost analysis. These links are divided into pre-control, in-process control and post-control according to the time when the cost occurs. Control to make cost forecast and cost plan in advance, and put forward requirements for control accounting; Process control carries out cost control and cost accounting to provide basis for analysis and evaluation; After that, control cost evaluation and cost analysis, and provide information for the forecast plan.

The process of cost control is the process of calculating, adjusting and supervising all kinds of expenses in the production and operation of enterprises by using the principle of system engineering, and it is also the process of finding weak links, tapping internal potential and finding all possible ways to reduce costs. Scientifically organizing and implementing cost control can promote enterprises to improve their management, change their operating mechanism, improve quality of enterprise in an all-round way, and enable enterprises to survive, develop and grow in a highly competitive market environment.

Second, the basic work of cost control

The starting point or platform of cost control process is the basic work of cost control. Cost control does not start from the basic work, and the effect and success possibility of cost control will be greatly affected.

1, quota formulation. Quota refers to the quantitative limit reached by the consumption of various resources such as manpower, material resources and financial resources under certain production technology level and organizational conditions, mainly including material quota and working hours quota. Cost control is mainly to formulate consumption quota, and only by formulating consumption quota can cost control be achieved. The formulation of working hours quota is mainly based on the income level of each region, enterprise wage strategy, human resources situation and other factors. In modern enterprise management, the labor cost is increasing, and the man-hour quota is particularly important. In practice, according to the production and operation characteristics of enterprises and the needs of cost control, there will be power quota and cost quota. Quota management is the core of basic work of cost control. The establishment of quota acquisition system, the control of material cost, fuel power cost, the establishment of labor contract system, the control of man-hour cost and manufacturing cost all depend on quota system. Without a good quota, the production cost cannot be controlled. At the same time, the quota is also the main basis for cost prediction, decision-making, accounting, analysis and distribution, and it is the top priority of cost control.

2. Standardization work. Standardization is the basic requirement of modern enterprise management and the basic guarantee for the normal operation of enterprises, which promotes the rationalization, standardization and high efficiency of enterprise production and operation activities and various management work, and is the basic premise for the success of cost control. In the process of cost control, the following three standardization tasks are extremely important. First, measurement standardization. Measurement refers to the measurement of quantitative and qualitative values in production and operation activities by scientific methods and means, so as to provide accurate data for production and operation, especially cost control. If there is no unified measurement standard and the basic data is inaccurate, it is impossible to obtain accurate cost information, let alone control it. Second, price standardization. In the process of cost control, two standard prices should be set. One is the internal price, that is, the internal settlement price, which is the value measurement of the simulated market exchange of "goods" between accounting units and enterprises; The second is the external price, that is, the settlement price of supply and marketing with external enterprises in the purchase and sale activities of enterprises. Standard price is the basic guarantee of cost control operation. Third, quality standardization. Quality is the soul of products. Without quality, even the lowest cost is futile. Cost control is cost control under quality control. Without quality standards, cost control will lose its direction, not to mention cost control.

3. System construction. In the market economy, the basic guarantee of enterprise operation is system and culture. System construction is fundamental, and cultural construction is a supplement. Without system construction, it is impossible to solidify the operation of cost control and ensure the quality of cost control. The most important systems in cost control are quota management system, budget management system and expense audit system. In practice, there are two problems in system construction. First, the system is not perfect. First of all, in terms of system content, system construction is more from the perspective of norms, which looks like a command. The correct approach should be to start from the operation of the system construction, so that the person in charge can find the correct positioning and facilitate the operation. Second, the implementation of the system is weak, always emphasizing the objective reasons such as poor management foundation and personnel restrictions. As soon as the content of interest adjustment appears, it will shrink and eventually lead to the failure of the system.

Third, the limitations of traditional cost control

The high-risk management environment, flexible customized production and highly automated manufacturing environment of modern enterprises need corresponding cost control systems, while the traditional cost control serving the relatively stable production and management environment has increasingly exposed its own limitations. The traditional cost control system takes responsibility accounting control and standard cost system as the core, and has the following characteristics and limitations: 1. The traditional cost control mainly divides the responsibility centers according to the functions, authorities, goals and tasks of the organization, forming a crisscross responsibility control system. Horizontally, the responsibility cost center is divided by functional departments, and vertically, three responsibility centers are established: factory department, workshop and team. Its limitation is that it is not easy to distinguish the attribution of many related and homogeneous expenses that do not belong to a single functional department. At the same time, it is easy to cause different responsibility centers to damage the overall interests of enterprises for the benefit of their own departments, and it is difficult to achieve the overall optimization of cost control. 2. The traditional cost control takes the product as the core to set the consumption standard, and sets the standard cost for the product with the costs of direct materials, direct labor, variable manufacturing expenses and fixed manufacturing expenses. The standard cost it adopts is single and rigid, which allows a certain degree of inefficiency, which conflicts with the modern management trend. 3. The traditional cost control only emphasizes the cost control in the production process of products, and pays insufficient attention to the cost control in advance, and can do nothing about the inherent cost defects caused by over-design or invalid design in the design scheme. 4. Traditional cost control regards the occurrence of cost as quantity-driven, and cost budgeting based on quantity tends to distort cost information. 5. The variance analysis benchmark of traditional cost control is only the business activities related to output, and the cost variance is determined by comparing the actual cost with the standard cost. This difference analysis is lagging behind, revealing only the results rather than the reasons. Because there are many defects in traditional cost control, we have established an activity-based cost control system, which is called activity-based cost control for short.

Fourth, activity-based cost control.

Take activity-based cost as the cost control goal in the manufacturing stage. Activity-based costing is a cost calculation method based on production automation and computerization, which is closely coordinated with JIT and total quality management. It focuses on the cost drivers and makes cost analysis according to the causal relationship of resource consumption. From the perspective of cost calculation, it takes cost activities as the accounting object, not products as the accounting object. Through the accounting of enterprise cost, the formation and accumulation process of cost are tracked, and the final product cost is obtained. According to the contribution of homework to enterprise value, homework can be divided into two categories: one is the homework that adds value, and the other is the homework that does not add value. Activity-based costing not only overcomes the defects of unclear indirect cost responsibility and serious distortion of information in traditional cost calculation methods, but also provides a new idea for cost management. The purpose of cost management is to eliminate activities that do not add value and synthesize activities that add value to make them play their greatest role. Therefore, activity-based costing is not only a cost calculation method, but a new cost calculation method combining cost calculation with cost management. Civil servant's home

Activity-based cost control is a new cost control method, which conforms to the high-risk business environment, flexible customized production and highly automated advanced manufacturing environment of modern enterprises. It has changed the standard cost system, from setting consumption standards for products to setting value-added cost standards for activities, from flexible budget based on quantity to flexible budget based on cost activities, and from quantitative variables to cost activities, from setting internal transfer prices based on traditional cost calculation for products or services transferred between production departments to setting internal transfer prices based on activity cost calculation for each operation center. The new cost control theory and method based on activity is an important application of cost management in cost control, and it is also an inevitable trend of cost control system with historical development.

Five, the scope of cost control is the product life cycle.

According to the needs of business decision-making, the total cost of product life cycle should be the goal of cost control. Generally, the product life cycle is divided into three stages: research and development, manufacturing and consumption, and each stage consumes expenses. The expenses consumed in the first two stages are called production costs, and the expenses consumed in the latter stage are called use costs. The production cost will increase with the improvement of product function, and the use cost will decrease with the improvement of product function. The value of products produced by enterprises can only be realized through sales, so the cost control of enterprises can not be limited to the control of production costs. The production of products must focus on the necessary functions required by users, so as to minimize the total cost of product life cycle. To implement cost control according to the needs of enterprise management decision, we should pay attention to product quality cost control. Quality cost is the total cost required to keep the product quality at the specified quality level, including prevention cost, appraisal cost, internal loss cost and external loss cost. Usually, the first two items are called quality assurance costs, and the last two items are called quality loss costs. The cost of quality loss will decrease with the improvement of product quality, but the cost of quality assurance will increase with the improvement of product quality. Therefore, in the process of cost control, enterprises should find a suitable quality level to minimize the quality cost.

Take the product life cycle cost as the cost control goal of new product development. Life cycle cost is to reveal the cost of each product from the initial research and development to the final customer service and support, which includes both research and development, manufacturing costs and use costs. Users will not only consider the purchase price when purchasing goods, but also the cost when using them, which requires enterprises to consider the total cost of product life cycle when developing new products. The adoption of life cycle cost method has the following three advantages: first, it focuses on the sales of products, emphasizing the income and cost related to each product, and overcomes the problem that traditional cost control only pays attention to manufacturing costs and ignores research and development costs and use costs. Secondly, it highlights the differences in the cost of each stage of the product life cycle, which helps to clarify the key points of cost control. Thirdly, it reveals the relationship between the costs in each stage of production and operation. There is often a trade-off relationship between the costs of each link in product production. Reducing the use cost of products may lead to an increase in manufacturing costs, which in turn may lead to an increase in use costs. Adopting life cycle cost method is helpful to reveal the internal relationship between costs and provide useful information for enterprise management decision.

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