business? The key to solving this problem is, distinguishing the types of costs that help increase profits and those that can be cut to move from savings to a growth and profitable area of business Fo.
business? The key to solving this problem is, distinguishing the types of costs that help increase profits and those that can be cut to move from savings to a growth and profitable area of business For example, managers will ask themselves: which of the costs is necessary to maintain a current competitive position? Which element is not necessary? Can sales staff benefits be cut? What about human resource management costs, financial and accounting costs? What are the factors that affect current returns and what are the benefits of reinvesting? Managers must clearly distinguish between good costs and bad costs, thereby adjusting costs at an appropriate level to optimize profits for businesses, creating a clear competitive advantage for their businesses Principle 4: Build the right conditions for current cost management Changing management and organizational processes are always the prerequisites for the most effective cost management activities This can be done in a few different ways – Firstly, the company builds a focused financial reporting system, thereby providing details on specific cost areas in each business division – Second, the management introduces new methods to monitor the performance of expenses and specific solutions to prevent misspending – Third, the company lists a group of “cost centers” under the direct management of the senior management This group of costs includes costs for both key functional activities and significant business activities 1.1.1 Measure to improve import business efficiency at ELECBIKE., JSC - Improve turnover In the process of operation, enterprises have to spend many expenses to serve their production and business activities such as raw material costs, wages for workers, wear and tear of equipment and machinery machinery, transportation costs, storage, marketing costs, advertising costs These costs directly affect the profit of the business Therefore, businesses need to pay attention to cost management because unreasonable and improper costs will reduce the efficiency of the business