Cost optimization to improve efficiency. Cost reduction: new action plan to improve operational efficiency

Labor Relations

For all other managers, the profit making scheme is extremely simple:

Profit = Gross income (turnover) - Expenses (distribution costs)

increase trade turnover while leaving expenses at the same level;

with the same amount of turnover, reduce costs;

increase gross income, reduce expenses.

The third way is the most profitable for any owner, but it requires skills and serious knowledge. In practice, most entrepreneurs, intending to increase their income, start by increasing spending on advertising and other marketing tools, without analyzing and managing their financial resources. Fussy actions, as usual, lead to patching holes and the formation of a bunch of new problems. Most often, for such negligent owners, the next stage of “debriefing” is to find the culprits and punish them.

In two of the three proposed ways to increase profits, reducing costs can significantly affect the amount of net income. Our portal has already written about reducing distribution costs - Reducing distribution costs: sources of profit in the company.

Profit becomes unmanageable if cost control at the enterprise is not set to the proper level. Each element on the expenditure side of the balance sheet must be analyzed and minimized.

The break-even activity of an enterprise is calculated using the formula: Gross profit = Sum of all expenses. Reaching the break-even point is a serious milestone for new businesses, implying a quick start to making their first profit. However, break-even activity cannot positively characterize a long-running enterprise: if the company does not make a profit, it becomes bankrupt.

When directly analyzing the actual cost of manufactured products, identifying reserves and the economic effect of reducing it, calculations based on economic factors are used. Economic factors most fully cover all elements of the production process - means, objects of labor and labor itself. They reflect the main directions of work of enterprise teams to reduce costs: increasing labor productivity, introducing advanced equipment and technology, better use of equipment, cheaper procurement and better use of labor items, reduction of administrative, managerial and other overhead costs, reduction of defects and elimination of unproductive expenses and losses. . Savings that determine the actual cost reduction are calculated using the following composition ( standard list) factors:

Increasing the technical level of production. This is the introduction of new, progressive technology, mechanization and automation of production processes; improving the use and application of new types of raw materials and materials; design changes and technical characteristics products; other factors that increase the technical level of production.

For this group, the impact on the cost of scientific and technological achievements and best practices. For each event, the economic effect is calculated, which is expressed in a reduction in production costs. Savings from implementing measures are determined by comparing the cost per unit of production before and after implementing the measures and multiplying the resulting difference by the volume of production in the planned year:

E = (SS - CH) * AN,

where E is savings in direct current costs

SS - straight current expenses per unit of production before the implementation of the event,

CH - direct current costs after the implementation of the event,

AN - volume of production in natural units from the beginning of the implementation of the event to the end of the planned year.

At the same time, carryover savings from those activities carried out in the previous year should also be taken into account. It can be defined as the difference between the annual estimated savings and its part taken into account in the planned calculations of the previous year. For activities that are planned over a number of years, savings are calculated based on the amount of work performed using new technology, only in the reporting year, without taking into account the scale of implementation before the beginning of this year.

Cost reduction can occur when creating automated systems management, use of computers, improvement and modernization of existing equipment and technology. Costs are also reduced as a result of the integrated use of raw materials, the use of economical substitutes, full use waste in production. A large reserve includes improving products, reducing their material and labor intensity, reducing the weight of machinery and equipment, reducing overall dimensions, etc.

At the express reduction stage, a decision is made to immediately stop financing those cost items that management considers unacceptable given the current financial situation of the enterprise. The following sequence of actions is possible:

Carrying out the most detailed inventory of the enterprise’s expenses (performed by employees of the financial and economic department).

Determining the category of each expense item and analyzing the consequences of abandoning unjustified expenses, decisions should be developed at a collective meeting with the participation of the heads of all key departments. (The four main categories of expenses are presented in Table 1.)

Complete cessation of funding for the fourth category of expenses if the goal is to reduce costs. In critical financial condition it is necessary to stop or sharply limit spending on the third category. In certain cases, it is possible to limit the costs of the first and second categories, although in this case one should remember the proverb: “The miser pays twice.”

Tab. 1 Classification of expenses by priority:

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For any business, the main goal is to maximize profits, increase market value enterprises in the interests of their owners. Adaptation of the enterprise to market conditions requires both a change in the functions performed and internal organizational restructuring, primarily additions organizational structure new links, revising the entire system of distribution of rights, powers and responsibilities.

Grade real needs market and own (available and potential) capabilities, focus on market demand- the cornerstone of developing an enterprise strategy and creating organizational mechanisms to support it. Company managers must constantly look for ways to reduce production costs without reducing the utility of the product. Usefulness - generally accepted economic term, expressing the expected satisfaction of needs as a result of the use or possession of goods. Often in the literature on management issues, it is also called “quality.” Some strategy theorists argue that two options are always open to a firm: cost-based competition and differentiation-based competition. However, this choice is artificial. Today, the company needs both low costs and differentiation aimed at increasing utility. Low costs help a firm create a differentiating advantage, either by lowering prices to consumers or by investing in products, services, personnel, or image enhancement.

At the first stage, an analysis of the structure of production costs of a specific product or the costs of a company division is carried out. Most costing and costing systems are ineffective in allocating costs to specific business units, products, or customers. Generally accepted rules accounting often give misconception about the true profitability of various divisions, so many firms have switched to activity-based costing, which allows them to get a real picture of the state of affairs.

The amount of a company's costs, in comparison with its competitors, is determined by the following financial factors. Economies of scale. As production increases, firms are able to achieve lower cost levels and spread fixed costs, such as R&D or advertising, across large quantity products. Experience. As a company acquires new knowledge that allows it to become more efficient, production costs decrease. Efficient use of capacity. A company that uses its production capacity at full capacity has lower costs. Connections The level of costs of one type is sometimes determined by the value of others. For example, a company, in comparison with its competitors, uses higher quality and more expensive materials, but these types of costs are more than offset by low production and maintenance costs. High costs in one area do not necessarily mean low efficiency. Relationships. When costs are spread across multiple products or departments (for example, R&D and order processing), the amount may be reduced. Integration. Vertical integration, where a firm takes over a function typically performed by outside contractors (such as transportation), is likely to reduce costs. Timeliness. If a company is first to market, it usually enjoys a cost advantage. Usually, at the first stage, creating a brand image does not require special costs, and early market penetration subsequently ensures low costs. Location. The territorial disunity of functional departments negatively affects labor, administrative costs, as well as costs associated with the purchase of materials. External factors. Tax rates, standards provided by trade union organizations, federal and regional regulation affect the firm's relative cost advantage. Marketing strategy. Factors aimed at increasing the utility of goods also affect costs. By endowing the product with various features and providing Additional services, the company incurs large costs, which it recovers by selling it at high prices or in larger quantities.

There are two alternative ways to increase the profitability of goods - increasing sales volumes and increasing the efficiency of their sales (i.e., making more profit while maintaining sales volume). Sales can be increased in two ways: by expanding the market or by penetrating it deeper. Sales efficiency increases when costs are reduced, prices are increased, or the sales mix is ​​optimized (i.e., eliminating low-profit activities).

We consider ways to increase the profitability of a product as alternative to each other. Thus, efforts to increase sales volumes require investment, and efforts to increase efficiency precisely contribute to the receipt of funds.

Similarly, increasing sales volumes involves using marketing strategies(aggressive pricing policy, investment in distribution channels, market expansion), which are fundamentally different from efficiency-oriented operations. The choice of strategic efforts depends mainly on strategic objectives related to a specific product. If the manager sees prospects for increasing his attractiveness, efforts should be concentrated on increasing sales volumes; If future distribution of a product is expected to be limited, it is necessary to focus on efficiency issues. Over a certain period of time, the focus on increasing sales volumes of a product gradually turns into a strategy for increasing the efficiency of its production and sales, i.e. the product will turn from a consumer financial resources into their creator. As prospects for product sales growth decline, management's challenge becomes to find new products and new markets to maintain business momentum.

In implementation modern methods cost management Russian practice market period significantly lagged behind the Western one. To make reasonable management decisions It is necessary to have information about the cost of production per unit of production.

There are various methods for accounting for production costs and calculating production costs. Their use is determined by the characteristics of the production process, the nature of the products produced (services provided), their composition, and the method of processing.

There is no generally accepted classification of cost accounting and costing methods yet. However, they can be grouped according to three criteria: by objects of cost accounting, by the completeness of the costs taken into account and by the efficiency of cost accounting and control.

According to cost accounting objects, process-by-process, part-time and order-by-order methods are distinguished. From the point of view of the completeness of the costs taken into account, it is possible to calculate full and incomplete (“truncated”) costs. Depending on the efficiency of accounting and cost control, a distinction is made between the method of accounting for actual (historical) costs and accounting for standard costs. The method of cost accounting and calculation is chosen by the enterprise independently, since it depends on a number of private factors: industry, size, technology used, product range, etc., in other words, on the individual characteristics of the enterprise.

The process method is most often used in the extractive industries (coal, mining, gas, oil, etc.) and energy. These industries are characterized by a mass type of production, a short production cycle, a limited range of products, a single unit of measurement and calculation, and a complete absence or insignificant amount of work in progress. As a result, manufactured products are both an object of cost accounting and an object of calculation.

To calculate the cost of products, one-, two- and multi-stage simple costing can be used. The unit cost of production is determined by dividing total amount production costs allocated to a specific department for a certain period of time, by the number of units produced during the same period of time.

Progressive cost accounting and calculation is used in industries with serial and continuous production, when identical products pass in a certain sequence through all stages of production (processing stages). The object of calculation is the product of each completed redistribution, and the object of cost accounting is the redistribution, i.e. part of the technological process that ends with the production of a finished semi-finished product, which can be sent to the next processing stage or sold externally.

The essence of this method is that direct costs are reflected in current accounting not by type of product, but by processing stages (stages) of production, even if in one processing stage it is possible to obtain products of different types.

The features of the incremental accounting method are: generalization of costs by redistribution regardless of individual orders, which allows you to calculate the cost of production of each redistribution; write-off of expenses for a calendar period; reduction of analytical accounting to a synthetic account “Main production” for each processing unit; simplicity and economy of cost accounting (no order accounting cards, no need to distribute indirect costs between individual orders).

In conditions of mass production of homogeneous products, it is possible to use simple costing. In mass production, a cost estimate is drawn up with the conversion of manufactured semi-finished products into conditionally finished products using the averaging method. In this case, the costs accumulated on the “Main production” account are divided into conventional units of the finished product produced in the reporting period. A unit of credit represents the set of costs required to produce one completed physical unit of output. The use of conventional units assumes that to produce a unit of finished product, one conventional unit of basic materials and one conventional unit of added costs are required.

This method allows you to recalculate products that have not been completely completed by processing into conditionally finished ones, which consists of two elements: the total quantity of products that were put into production and processed in the reporting period, and an element reflecting the costs that were incurred on work in progress for the same period.

The custom costing and costing method is used when producing a unique or custom-made product. It is used, as a rule, in enterprises with a single type of production organization, as well as in small-scale enterprises, in construction and the service sector.

The essence of the method is that all direct costs are taken into account in established costing items for individual orders. All other costs are accounted for where they arise and are included in the cost of orders in accordance with the established distribution base.

The object of cost accounting and calculation is a separate order. The custom accounting method is inherent following features: summarizing costs by order; writing them off during the production of the order; maintaining order cards, as well as the need to distribute indirect costs between individual orders.Process-by-process, incremental and order-by-order methods of cost calculation can be used when taking into account full and variable costs, as well as when normative method cost accounting. Depending on the completeness of inclusion of costs, methods of accounting for full and variable (direct) costs are distinguished.

A feature of full cost accounting is that direct costs are directly attributed to a unit or other measure of production in accordance with developed and used standards. In this case, indirect costs are attributed to a unit of production in proportion to some base using overhead coefficients.

As a rule, cost accounting when calculating products is carried out in several stages: accumulation of all costs at the places of their occurrence and distribution of indirect costs between departments; redistribution of costs of divisions that do not produce the final product to divisions that produce the final product, in proportion to any base; redistribution of overhead costs of departments that produce the final product (own and redistributed) to manufactured products in proportion to some base.

Disadvantages of the presented method: when using several distribution bases, the likelihood of mathematical errors increases; it is impossible to effectively determine the price for an additional order, since with this method all indirect costs are variable; it is impossible to determine at what point in the activity the enterprise begins to make a profit; it is impossible to obtain the necessary information about the behavior of costs when considering various alternatives for making management decisions.

The organization's profit is calculated as the difference between revenue without indirect taxes and the full cost of the product produced and sold.
Another option for accounting for production costs and calculating products is to calculate full cost. There is no single approach to which costs to include in the cost price. Only direct costs, variable costs, or production costs can be included in the cost price. But, despite the varying completeness of inclusion of various types of costs in the cost price, the common thing is that part of the current expenses is not taken into account and is not calculated, but is covered by marginal profit, which before reaching the break-even point includes fixed costs, and after reaching it - profit before tax (operating profit). It is this kind of cost accounting that underlies the “direct costing” system. The essence of this system is that variable costs are summarized by type of finished product, while fixed costs are collected in a separate account and written off to the general financial results of the reporting period in which they arose.

The reliability of the results of cost analysis under this accounting system is largely determined by the clarity of the division of costs into fixed and variable. A typical situation that requires the allocation of fixed and variable costs is a limited market with strong competition, when it is necessary to constantly monitor costs and plan the sales volumes necessary to make a profit, i.e. calculate the break-even point. The problem is that even for two similar businesses, the same expense items may be allocated differently. This happens for a number of reasons: in particular, there are conditionally fixed costs, which may depend on production volumes, but grow in steps, and conditionally variable costs - depending on the production volume, but having a constant part - accordingly, an individual approach is required. Incorrect information may also appear if there are errors (inaccuracies) in the distribution of indirect variable costs among products. Such information may mistakenly portray the line of business as unprofitable. Closure itself is associated with additional costs, but in order to resume work in this direction, even greater additional costs will have to be incurred, i.e. the accuracy of classification and allocation of costs may in some cases affect the acceptance strategic decisions.

However, even after a thorough analysis, it is necessary to monitor the quantitative indicators of individual items - they may change over time, - accordingly, the value of the break-even point will change. When traditionally calculating the break-even point, it is necessary to make some assumptions: there will be no changes in prices for raw materials and products during the period for which planning is being carried out; fixed costs remain unchanged over a limited range of sales volumes; variable costs per unit of output do not change as sales volume changes; sales are carried out evenly.
In fact, the value of a particular technique for us, as a consulting agency, is not in finding “the only right solution,” but, on the contrary, in having greater freedom of action. In this sense, calculating the break-even point is a very useful technique; it leaves a wide field for managerial maneuver. Logic dictates, and historically it has happened, that manipulation of the break-even point begins only after the stage of accounting and cost reduction has been completed. But the opposite option is also possible - changing the position of the break-even point to a more acceptable one for the enterprise, without increasing production volumes, but only by reducing costs.

Of independent interest is the analysis of the ratio of fixed and variable costs as part of the cost of a product (limited cost accounting systems - “direct costing”). On the one hand, there is a recognized reliability limit for the possible implementation of a flexible pricing policy in a competitive environment of 60% of the threshold level of variable costs. On the other hand, a higher specific gravity fixed costs reduces cost control for the product as a whole. Growth trend of share fixed costs V Russian conditions caused by a decrease in production volumes and, accordingly, load production capacity. The emphasis should be placed primarily on analyzing coverage amounts based on the actual market selling price. If the safety margin is absent or small, then, most likely, we have to talk about imbalances in the volumes produced and the infrastructure of the enterprise.
Using a limited cost accounting system, you can quickly study the relationships and dependencies between production volume, costs (cost) and revenue (profit, marginal income).

It focuses the attention of enterprise management on changes in marginal income (coverage amount) for the enterprise as a whole and for products. It allows you to better take into account products with high profitability in order to switch mainly to their production, since the difference between the selling price and the amount of variable costs is not obscured as a result of writing off constant indirect costs to the cost of specific products.

By reducing cost items, its rationing, accounting, control is simplified and, in addition, accounting and control of semi-fixed, overhead costs is improved, since their amount for a given specific period is shown in the income statement as a separate line, which clearly demonstrates their impact on the amount of profit enterprises.

The main advantage of the coverage amount accounting system is that, based on the information obtained in it, it is possible to make operational management decisions. First of all, this concerns the ability to implement an effective pricing policy. Currently, approaches to pricing are more popular in the West, in which, first of all, factors related to demand rather than supply are taken into account, i.e. an assessment of how much the buyer can and wants to pay for the product offered to him. Once the equilibrium price has been established, the company must analyze all its costs and try to minimize them.

In addition to information about the amount of costs associated directly with the production of products, enterprise managers need to have information about the possible limits of price reductions depending on the influence of market factors. Therefore, in Western management accounting there are concepts of long-term and short-term lower price limits. The long-term price floor shows what price can be set to minimally cover the full costs of producing and marketing a product; it is equal to the full cost of the products. The short-term price floor focuses on a price that covers only direct (variable) costs; it is equal to the cost in terms of only direct (variable or production) costs.

Taking into account the limited cost system, there is also the possibility of implementing a dumping policy, calculating and choosing various combinations of the price of a product and its sales volumes.

For enterprises operating in market conditions, situations related to underutilization of production capacities are common. Idle costs arise - part of the fixed costs attributable to unused production capacity. In such cases, only the information obtained in the coverage amount accounting system can lead to correct decisions.

Having records of limited costs and coverage amounts ( marginal income) by product, it is possible to solve such management problems as optimizing the range of products if there is bottlenecks, the feasibility of accepting an additional order at prices lower than usual, producing components ourselves or purchasing externally, definition optimal size batches or series of parts (products), selection and replacement of equipment, etc.

The standard accounting method involves the preliminary determination of standard costs for operations, processes, and objects with the identification of deviations from standard costs during production. Actual costs are determined by the algebraic addition of costs according to standards and deviations from them. At an enterprise that has chosen this system, accounting is organized in such a way that all current costs are divided into consumption according to norms and deviations from norms. Variance is the difference between standard and actual costs. The prototype of the domestic regulatory accounting system is the “standard-cost” system, which is a system for determining costs based on estimates of costs that must be incurred in accordance with standards, and not on costs actually incurred. One of the consequences of using “standard-cost” is the occurrence of deviations in production costs related to direct material costs, direct labor costs and general business expenses. The direct material cost variance can be decomposed into usage and price components. Deviation for labor costs - for components according to productivity and according to the payment rate. Deviation for general business expenses - for components based on production volumes and actual costs. The purpose of decomposing deviations into components is to increase the level of analysis of actual results carried out by managers of different ranks. Responsibility for a specific component of any type of cost is assigned to a specific responsibility center. However, the components of deviations may be interrelated. When deviations from standards are identified, the cause is determined and eliminated. If necessary, standards are revised. The basis for implementing the system is normative base, which at most machine-building enterprises has almost been destroyed or, at least, has become formal and poorly connected with real activities. The “standard-cost” system is well developed, its implementation is simplified by the experience of maintaining a normative type of accounting in the Soviet period and complicated by sharp fluctuations in prices, tariffs, business operating conditions, which can reduce a tremendous amount of work to zero results.

The development of standards should be carried out by the organization's services responsible for the relevant cost items. Typically, the technology service determines standards for the use of materials, the supply service determines price standards for materials, Production Department sets production standards for operations, and the personnel service sets hourly wage rates for occupations. Manufacturing accounting summarizes these standards and sets overhead standards. To establish standards for overhead costs, based on production standards, all costs by item are divided into fixed and variable and a rolling estimate is prepared.

Accepted standards are summarized in accounting into standard cost cards. The content of the cards depends on the nature of production, the number of products and their complexity. The coordination of work, generalization and presentation of data from the standard-cost system of the company as a whole is usually carried out by the controller. He is responsible for preparing deviation reports and proposing revisions to standards. Companies often create standards committees, which include representatives of all interested services related to the standard-cost system. The committee reviews the plan for implementing the system, determines its main prerequisites (the nature of the standards, methods for identifying deviations from standards, etc.), makes recommendations for improving the system and revising existing standards.

Having established the necessary standards, we begin to monitor deviations from them, which allows us to identify malfunctions. This management aspect of using the information contained in variances is part of the responsibility center costing process.

Any standards may require revision. Their nature also determines the timing of revision. The different contents of the standards naturally lead to different timing of changes. Therefore, we can talk about the principles of changes according to current and basic standards. The current standard cost is usually revised when prices, processes, and product specifications change to such an extent that it becomes difficult to control current activities without changing the standards. Another reason for changing current standards is that they are later discovered to be incorrect. Once a year, usually before preparing cost estimates for the following year, a complete review of the standards is carried out. The basic standard cost changes only in the event of a radical change in production technology, enterprise capacity, or when the basic standards are excessively detached from actual performance and lose their meaning.

A characteristic feature of estimates where standards are developed is the application of the principle of sliding (flexible) estimates. The essence of this principle is that the so-called normal production volume is established. Its level depends on the company's policy and environmental conditions: it can correspond to 100% of capacity, it can be set according to the volume of existing orders or the forecast of expected sales. After determining the normal volume of production, the cost of it is calculated for each overhead item. Costs are then calculated for a range of production levels below and above normal output.

The sliding estimate is used in several directions. First of all, it allows you to make sure that the estimate is drawn up correctly. Subsequently, it is used in a number of management decisions related to changes in production volumes. So, for example, if there is a change in conditions affecting production volume, a rolling estimate allows you to determine the economic effect of this change and the ultimate impact on the company's profit. A rolling estimate is also used for control purposes for periodic evaluation of the work of workshop and site managers: comparison of actual costs with the estimate, depending on the achieved production volume, allows one to establish savings or overruns.

The standard-cost system can be considered in conjunction with cost planning. When planning the cost, the actual indicators of the previous year can be “cleared” in the process of analysis from various types of losses. In order for the estimate to meet the specific conditions of the planning period, when planning cost estimates for the future period, it is recommended to take into account various changes in conditions: changes in the composition of equipment, changes in the range of products, production methods and materials used, changes in the organization, personnel, labor time budget and productivity, price changes , changes in management policy, changes in production cycle times, random fluctuations.

The cost planning system and the “standard-cost” system are aimed at organizing cost control to achieve the ultimate goal - obtaining maximum profit. If the company does not use the standard-cost system, then budgeting and cost planning is the main lever for cost control. The opposite option is also possible, when “standard-cost” is an effective means of controlling the company’s costs. If a company applies ideal standards that are practically unattainable, then planned estimates are used for current control. If “standard-cost” uses current standards, then cost planning and “standard-cost” practically coincide.

If expected actual standards are developed for use in a standard-cost system, the same standards should be used for cost planning in the annual profit plan and for cost control purposes. Then it is obvious that the expected actual standards and the planned cost are identical, deviations from the plan and from the standards must be identical.

On the other hand, if the standard-cost system uses standards that differ from expected actuals, a difference arises between standard and planned costs. As a rule, standards that differ from the expected actual ones will be “tighter” than in the plan. But even in this case, calculating the standard cost can still be used for planning (although the estimate in this case should include the amount of planned deviations between the expected actual and standard cost). Thus, the cost planning system and the standard-cost system complement each other; when using current standards, they essentially merge into one system, i.e. there is a process of integration taking place. The main difference between the functional method of cost accounting and traditional methods of cost distribution is the use of several bases for the distribution of overhead costs for a separate product group, depending on the reasons that determine the occurrence of costs in the process of movement of goods of this product group throughout the company. Thanks to this technique, accounting accuracy increases.

The functional costing method uses a two-stage allocation process. At the first stage, overhead costs are systematized in detail, then grouped, not by economic content and places of occurrence, as in traditional accounting, but by individual business transactions. Costs can either be directly attributed to a specific operation or allocated among operations depending on the distribution base chosen.

At the second stage, costs are distributed between products, depending on the number of goods produced business transactions, proportional to certain bases. Finding distribution bases that would most reasonably attribute overhead costs to specific products is the most labor-intensive stage in implementing a functional cost accounting method. A business transaction is understood as an event or transaction, the consequence of which is the emergence of costs in the organization, for example, the development of plans for the purchase and sale of products; acceptance of goods received from the manufacturer; quality and quantity control of goods; release of goods from the warehouse for sale; moving inventory within the company, etc. The number of types of business transactions depends on the complexity of the organization's functioning. However, not all types of products are equally covered by the costs of carrying out certain business operations. Thus, one type of product may be purchased and sold in small quantities, but require a special storage and transportation regime, have packaging that is difficult to handle, etc. Another product may have a higher volume of purchases and sales, but much less significant processing requirements when moving within the enterprise. If the accounting department of an enterprise does not pay attention to the difference between these two types of products in the process of allocating costs and assigns overhead costs to both goods in proportion to some volumetric indicator, for example, the purchase price, then the product characterized by a high value of the volumetric indicator will take on the lion's share of the total overhead costs.

The result will be a serious distortion of the cost values ​​of both types of products. The application of the functional cost accounting method solves the problem of cost distortion by combining costs into items in accordance with the type of business transaction, which can be defined as the primary carrier of costs, and further distributing overhead costs between types of products depending on the number of individual business operations necessary for their implementation .

Where appropriate, companies prefer to transfer costs directly to activity centers to avoid any distortion of product costs resulting from misallocation of costs.

The second step in the costing process is to transfer costs from activity centers to the cost of goods. It is carried out through the selection and use of secondary distribution bases. When choosing bases, two factors must be taken into account: the availability of data relating to the distribution base; The accuracy with which the distribution base measures the level of actual cost contribution of a product.

Detailed information characterizing an individual distribution base is quite difficult to collect. The lack of sufficient financial resources to implement information collection systems is the main barrier to the application of the functional cost accounting method, and this factor is most often taken into account by company managers who refuse to use this method. Therefore, initially it is better to choose a distribution base about which information is already available. The fungibility of some distribution bases should also be taken into account. With this approach, the costs of obtaining information about distribution bases are minimized.

High-tech companies have sophisticated systems for collecting information related to distribution bases. This becomes feasible thanks to the introduction of network computer systems, which, in accordance with established algorithms, collect a large amount of data about each step of the process of movement of goods in the company.

When choosing a distribution base for each activity center, managers must be confident in accurately determining the “degree of consumption” of the activity for a particular type of product. If there is no correlation between the distribution base and product costs, then the calculations will lead to an erroneous result.

Rationalizing the distribution of overhead costs across products requires a large preparatory work and financial investments, including in the acquisition computer equipment, and installation of networks. But still, managers should think about placing accounting in the management service now.

In Western accounting, increasing attention is paid to the distribution of general business, sales and supply expenses, since in Lately their share in production costs began to increase rapidly. The main goal of introducing functional cost accounting is cost management through the management of business processes. Costs arise when performing any functions, and increasing the efficiency of execution various functions leads to optimization of the cost structure of the enterprise.

The combination of a functional cost allocation method, direct costing and calculation of coverage amounts gives companies the opportunity to truly get a complete and real picture of costs for planning, making strategic decisions and implementing them.

Analysis of existing ones once again shows us certain problems in their use on modern Russian enterprises, individual methods do not solve the problem effective management enterprise in conditions market economy, a systematic approach to cost management is required. As a rule, it is not possible to do this enterprise on your own - and here the point is not in costs or efforts; on the contrary, personnel who do not have experience in optimizing costs using technologies that are accepted throughout the civilized world can spend years and not achieve successful implementation. Our consulting company is able to resolve most of these problems within months.

If you are interested in using our services, please contact us - we will definitely help you!

Revenue consists of income and expenses that the organization has to bear. That is why reducing the company’s expenses becomes the only source of high profits. A wrong strategy to reduce a company's costs can lead to its bankruptcy. How to reduce enterprise expenses without risking your business?

The organization’s work is aimed at generating high income, which is why the company’s employees try to reduce the company’s expenses. Carrying out such a procedure is problematic, since it can affect the quality of work of staff and the organization as a whole. Reducing cash costs can be implemented in several directions. Mainly, this may be a reduction in non-operating and operating expenses, which has a major impact on the cost of goods. The role of such expenses is the cost of management, production of goods, etc.

How to avoid unnecessary costs

1. The company must be able to operate profitably and get rid of accounts receivable as quickly as possible.
2. If it is not possible to completely eliminate production costs, the planning system should be reviewed.
3. Increase quality by reducing the production of products with defects and scraps.
4. Correctly plan the methods of moving materials and the location of process equipment. Often, in order to perform a certain operation, a worker has to travel to the other end of the city, and the enterprise incurs new expenses.
5. The company should deal only with “live” goods, and not leave them in reserve, which can only “dead” the activity of the enterprise.
6. To reduce costs, unnecessary processing technologies must be avoided. In other words, the company spends extra money on the production of unclaimed characteristics.
7. We must not allow periods of downtime and waiting, which may be caused by the fault of suppliers, equipment breakdowns and miscalculations in planning the utilization of production capacities.
8. Don't get carried away with loans. Entrepreneurs need to make forecasts for their future and constantly monitor capital growth. Profit receipts may vary from time to time resulting in cash gaps. In any case, the bank will demand to pay the debt at full rate, and this can cause a serious blow to financial situation enterprises.
9. If a company obtains a license for a product, this can significantly reduce monetary losses.

To reduce costs, entrepreneurs prefer to change unrealized expenses, which are classified as additional, since they have nothing to do with the operation of the company. Saving on quality can significantly reduce demand for a product. And if you limit spending on the development and progress of the company, over time the product risks becoming unclaimed.

Ways to reduce costs

There are 3 main ways to reduce company costs affecting different areas activities.

Saving on rent. First, the organization can reduce costs on various leasing and rental payments to outside organizations and private representatives for the use of equipment or real estate. It is more profitable to purchase everything you need than to make a monthly payment for something that will never become personal property. You need to select a room so that there is not a lot of free space left, for which you will have to pay money.

Savings on labor costs. Some organizations hire a large number of staff, or some of them simply cannot cope with their responsibilities. Such workers should be identified and removed from work. Changing the way wages are paid can also increase income. For example, staff are not interested in work efficiency when they receive a salary. If the company offers them a piece rate, their ambition to attract new clients will increase, their earnings will increase, and following this the company's income will begin to increase. You can also change the number of working hours if there is no need for staff to be present at the workplace full time.

Tax savings. Also, optimization of enterprise expenses depends on the level of taxes. Especially for entrepreneurs, the government has developed a series of various preferential programs for production that can help in business. But here you need to have a special approach and act only within the framework of the law.

Specialization and reorganization of the company can be identified as a separate area of ​​savings. The method is most productive if you simultaneously reduce some of the workers. In such a situation, the organizational structure of the enterprise completely changes.

In the current environment of economic growth, such steps are considered sufficient effective techniques to increase the financial independence of the company.

Reducing costs at an enterprise is a logical process in conditions of economic instability. How to do this correctly? Step by step about effective methods reducing company costs - further in the article.

You will learn:

• What types and options exist for cost reduction?
• How to plan and implement cost reduction measures
• What methods of reducing costs are most effective in practice?
• How to reduce material costs
• What are the benefits of reducing transportation costs?
• How cost reduction strategies are chosen
• What are the basic cost principles to consider?

Classification of costs in an enterprise

Effective and ineffective. There may be effective costs (they relate to generating income through the sale of products for the production of which they were allocated) or ineffective costs (they relate to tasks that are not related to generating income and involve losses). Among ineffective expenses are any types of losses - due to defects, theft, downtime, shortages, damage, etc. Therefore, you need to focus on reducing the amount of ineffective expenses. Therefore, it is necessary to establish acceptable technological costs, determining liability in case of violation of acceptable standards.

Another area of ​​cost reduction is analyzing the effectiveness of auxiliary work using outsourcing companies in some areas. Involving third-party contractors on a competitive basis is a real and effective option for reducing costs for medium and large organizations. Although sometimes it is more profitable to maintain your own departments compared to attracting third-party organizations, this situation is no longer considered the rule, but the exception.

Relevant and irrelevant. Any manager needs to monitor whether control and planning depend on his management decisions. If they depend, then such expenses are relevant, but otherwise they will be irrelevant. In particular, expenses during past periods are irrelevant because the CEO can no longer influence them through his decisions. And opportunity costs are among the relevant ones, so management should pay special attention to them.

Constants and variables. Variable, fixed or mixed costs are possible - depending on the level of production. Variable costs are directly proportional to the level of production, without affecting fixed production volumes; mixed costs contain both constant and variable parts. This separation ensures cost optimization – a particularly important condition for controlling fixed costs.

Direct and indirect. Direct or indirect costs are possible depending on the method of attribution to the cost of production. Direct costs can be attributed to a certain type products or services. This category includes costs for the purchase of raw materials, supplies, and wages of production workers.

Indirect costs do not have a direct connection with a particular type of product. Indirect costs include the costs of managing and maintaining departments to manage and maintain the enterprise as a whole. If an enterprise produces only one product, then all costs of its production and sale will be direct.

A set of instructions for a manager that will save a company from ruin

A smart checklist and 18 instructions, prepared by the editors of the Commercial Director magazine, will help you figure out how to urgently change the work of the sales department so that the results at the end of the year will please you and not disappoint you.

Where to start reducing costs in an enterprise

The first step is to classify expenses into clearly defined categories.

The second step is to determine which costs are subject to adjustments.

The third step is to plan and reduce expenses.

6 ways to reduce costs

1. Reduce labor costs

The provisions of the current domestic legislation allow companies to reduce both the number of employees and wages.

2. Reducing costs for materials and raw materials. To reduce the cost of purchasing materials and raw materials, the following steps can be taken by the enterprise.

– review of contract terms with existing suppliers;

– search for new suppliers;

– use of less expensive components whenever possible;

– helping suppliers reduce their costs;

– purchasing materials together with another buyer from one supplier;

– independent production of necessary materials;

– introduction of resource-saving technological processes, contributing to savings on the cost of raw materials;

– giving primary importance to the procurement process of materials and raw materials;

3. Reduce production costs. Let's look at questions that can be used to evaluate the effectiveness of cost-cutting efforts:

1) Lease payments:

– is it possible for the company to revise the terms of the current lease agreement?

– Is it possible to move to another room or building?

– is it possible to sublease part of the company’s occupied space?

– Could it be more profitable for a company to buy out the leased premises?

2) Utility payments:

– Is it possible for the company to have stricter control over energy consumption?

– does the company have the opportunity to implement more cost-effective processes?

– is it possible to transition to new conditions for paying utility tariffs?

3) Equipment repair and maintenance:

– is it possible to postpone it for a long time or a short time certain works as part of routine equipment maintenance?

– whether it might be more profitable for the company to refuse the services of contractors and undertake equipment repairs on its own. Or would it be cheaper to hire a specialized organization if the company itself is responsible for ongoing maintenance?

– can the company come to an agreement with current contractors to improve the terms of the equipment maintenance agreement in its favor?

– is it possible to search for new service providers for the company?

4) Integration and disintegration

– Is it possible to reduce company costs thanks to vertical integration with suppliers or customers, or through horizontal integration with other manufacturers?

– Is it possible to reduce a company’s costs by expanding the scope of its business to other parts of the production cycle, without working with related companies? Or would it be more beneficial to narrow production sector, part of the production cycle or carrying out auxiliary work outsourced to another manufacturer?

5) Transport:

– is it possible to limit the quantity official transport?

– Can the option of outsourcing the functions of a motor transport workshop to a motor transport company be considered?

– wouldn’t it be easier to attract logistics company(or a professional logistician) for the purpose of consultations on reducing transport costs?

• How to optimize business expenses: instructions for managers

– is there data that confirms the compatibility of an increase in advertising spending with an increase in sales volume?

5. Additional cost reduction measures. Is it possible to reduce company costs in the following areas:

– conducting development and research work;

– maintaining a wide product range;

– maintaining a certain quality of services provided;

– maintenance wide range their clients;

– mechanization of the production process;

– increasing the level of personnel qualifications;

– careful selection of components and raw materials that meet certain technical parameters;

– speed of order fulfillment;

- organization of production;

– maintaining flexibility in the production process;

– maintaining the existing policy on maintenance of machinery and equipment;

– support of distribution channels for manufactured products.

6. Government support. Is it possible for a company to benefit from a certain state program to support entrepreneurship through the following actions:

– lobbying for the adoption of relevant federal and local legislation;

– receiving subsidies and benefits.

• Attracting borrowed funds: how to speed up the formation of company financial funds

What other ways are there to reduce costs?

1. Reducing tax costs:

– conclude an agreement with the individual entrepreneur.

– conclude agreements with legal entities. persons.

– organize a holding structure operating under a simplified taxation system.

– management functions transfer to a separate legal entity. face.

2. Reducing the cost of maintaining unused property:

– sell materials that were generated during the dismantling process;

– do not write off, but sell depreciated fixed assets.

3. Innovative cost reduction:

– introduction of more economical equipment and technologies.

– develop low-cost production.

4. Reducing costs associated with depreciation:

– transfer the property for repeated use of premium depreciation. The company has the right to write off up to 10% of the original price of a fixed asset as a lump sum as expenses of the current reporting period.

– reduce the period of use of the object by the time during which it was used by the previous owner for the purpose of calculating depreciation.

– proof of the repair nature of the work instead of modernization and reconstruction;

– recognition as an expense of the redemption value of the leased property, in the case of accounting for the object with the lessor.

5. Dealing with debt:

– implementation in any cases of measures to collect debts.

4 methods to reduce logistics costs

Review of the logistics service. The logistics of the enterprise is built on the principle of “it just so happens”, and not according to a pre-established plan. But even when organizing this work on the basis of a plan, according to experts, a quarterly review of the main functions in the department is necessary to determine whether any of them have lost their relevance.

Practice confirms that thanks to this review, many points of loss of time and finances for the company can be identified.

Thanks to the logistics audit, it is possible to critically. In particular, one company had several specialists on staff who translated the same type of invoices for customs and banks. Based on the results of consultations with the broker and the bank, a glossary of frequently used words was sent to customs, with the compilation of certain templates for translation, which made it possible to part with translators.

If organized in a company logistics system With a clear structure, understandable KPIs and control, these measures will allow you to get an immediately noticeable effect. Next, it is necessary to optimize individual functions of the enterprise.

Inventory Management. It is necessary to calculate the required stock of warehouse stocks, the minimum safety stock, the volume of products that are in transit, with the development of delivery schedules and payment of bills. Thanks to this, it will be possible to significantly reduce associated costs.

Transportation planning. First of all, to reduce logistics costs, reliable transportation in terms of timing and safety of the cargo is necessary. Thanks to this, the transport can be used as a warehouse on wheels, with a significant reduction in overall storage costs.

To reduce transportation costs, it is important not so much to demand discounts from carriers as to competently plan for cost reduction. It is noteworthy that the most effective option for reducing transport costs is loading in 2 years. In 2nd place in terms of efficiency is maintaining stability of downloads according to schedule.

Choosing the right logistics service provider. In this matter, you need to take a critical approach to “old loyalties”, conducting constant research into available services and prices.

When summing up, it can be noted that to optimize logistics and reduce related costs, the main condition becomes systems approach. In a company in which a holistic system can be established, training employees to constantly make plans, make decisions based on calculations rather than traditions, daily process improvements occur, and periodic audits involve only making minor adjustments, contributing to the achievement of success for the company. Experts from the General Director School will tell you more about accounting and division of expenses.

First of all, you need to start with optimizing the logistics department

Maria Isakova,

logistics expert, Moscow

Companies in most cases strive to optimize the part of logistics that is managed by counterparties. Often, such optimization begins with the transport component, negotiating with carriers and forwarders to reduce prices. But it can be clearly stated that it is impossible to achieve more from carriers every time. low prices, and the effect of such a decrease is reduced. To ensure maximum results, the beginning of a policy to reduce logistics costs should be the optimization of the logistics department.

Sample cost reduction plan

Cost reduction planning involves a set of activities divided by time frame:

1. Maintaining financial discipline. Measures are being taken to ensure compliance with financial discipline. In particular, a plan is developed, strictly following the approved data. Decisions made by the manager and recorded in the budget can only be violated in exceptional cases.
2. Organization of accounting. To systematically reduce the costs of an enterprise, it is necessary to implement a system of financial accounting and control. Not only costs, but also income of the enterprise are subject to accounting. It is necessary to carry out operational measures aimed at debt collection. Also, the enterprise itself needs to promptly make budget payments, and payments for staff and contractors, which allows you to avoid penalties.
3. Development and implementation of a cost reduction plan. The goals of the cost reduction program are to present the most detailed target values ​​for cost items to be reduced. As part of these activities, it is expected to develop a plan for the entire enterprise, identifying weak points where cost reduction is possible, and for each structural unit– to strengthen local financial discipline.
4. Carrying out inspections. To assess the effectiveness of cost reduction, independent monitoring is constantly needed, which will allow for an assessment natural loss, possible shortages, technological losses, with the necessary adjustments being made to the plan for reducing relevant costs.
5. Loss analysis. Any result, including a negative one, should be carefully rechecked to reduce further costs. Analysis needed production losses forcing the sale of products (services) at reduced prices. Defects, alterations and defects also deserve special attention. This not only leads to a reduction in production costs, but also to additional costs. Production interruptions and waiting for products can also cause increased costs.

What problems may arise during cost reduction?

1. It is difficult to identify the most important cost items that require reduction. These errors are typical for medium and small enterprises, because usually their management is well informed about the most significant expenses. But as companies expand and become more complex, they may encounter a situation where management may not notice increased costs in certain areas.
2. The source of the enterprise's costs was incorrectly identified.
3. Along with the extra costs, they lost their individuality, resulting in the competitiveness of the product, especially if its distinguishing feature was quality.
4. Seriously damaged relations with the parties involved in the business
5. Reduced costs in important areas below the acceptable limit.
6. Misunderstanding of the enterprise's cost mechanism.

Lack of motivation

Konstantin Fedorov,

development director of PAKK company, Moscow


When optimizing costs, enterprises usually use administrative leverage according to the principle “if you don’t cut costs, we’ll fire you.” Because of this, a situation arises when ordinary employees and managers of the company begin to sabotage the changes, either explicitly or openly. Moreover, many consider optimization a sign of the weakness of their leadership.

Advice. You should agree in advance how the company will thank all participants in the cost reduction program after its implementation. However, this gratitude does not necessarily have to be financial. In particular, you can think about a career advancement or other options.

1. Keep track of your expenses and they will decrease. Sometimes cost reduction can be achieved simply by taking it into account and understanding it.
2. Your employees are your like-minded people. You should convey to your employees the importance of cutting costs. You need to explain to them that you appreciate their cost-cutting suggestions.
3. Sort out your costs according to the degree of dependence on production. Accounting systems are mostly divided into variable and constant. Variable costs (direct labor costs, raw materials, etc.) depend directly on the volume of output. Fixed expenses (travel expenses, wage For management personnel, bills for water, heat and energy, etc.) usually do not depend on production volumes. Some companies have adopted a classification of variable costs depending on the ease of their adjustment when production activity changes.
4. Divide costs according to how easily they can be adjusted using alternative solutions.
5. Monitor not only the cost structure, but also the reasons for their occurrence. Thanks to this, it is possible to take the necessary measures aimed at eliminating the causes of unwanted increases in costs.

Cost planning and control – from prices to energy consumption

Walter Bory Almo,

General Director of the Ufa Meat Canning Plant

Our financial planning department processes all available information to plan and control costs - from ingredient prices to equipment performance and energy consumption. Constant analysis is the basis for further cost reduction. We divide the costs of our work into 2 categories - for some, significant investments are required, in the case of others, simple procedures will be sufficient. Don’t give up on simple solutions that can help you achieve tangible results with minimal spending.

To analyze the results we use the KPI system key indicators efficiency. The data is compared with the results of five companies in our holding. It is not always possible to achieve results thanks to this information, because we are leaders in many indicators. Therefore, we are also collecting data on our competitors.

We also involve employees in our work to reduce costs. For any employee, thanks to whose idea it was possible to achieve a tangible economic effect, a bonus of 3 thousand rubles is allocated.

Information about the author and company

Maria Isakova, logistics expert, Moscow. She started her career as a logistician for Bayer. In 2001–2008 – head of the logistics department, since 2009 – head of the logistics and order management department of the Lanxess company.

Walter Bory Almo, CEO Ufa meat-packing plant. OJSC "Ufa Meat Canning Plant" is one of the leading enterprises in the meat processing industry of the Republic of Bashkortostan. It produces more than 150 types of food and technical products, as well as raw materials for the leather and medical industries.

Zoya Strelkova, Leading financial analyst, head of the “Company Economics” department of the group of companies “Training Institute - ARB Pro”, Moscow. Specializes in researching the economic state of companies, developing economic business models, strategic planning and other issues. Participated in the implementation of more than 20 projects strategic planning for enterprises of various industries. Conducts seminars “Strategicity of everyday life. PIL-approach" and "Finance for managers". "Training Institute - ARB Pro". Field of activity: business training, HR consulting, strategic management, information support business. Form of organization: group of companies. Territory: head office – in St. Petersburg; representative offices in Moscow, Nizhny Novgorod, Chelyabinsk. Number of staff: 70. Main clients: Moscow Financial and Industrial Academy, Sberbank of Russia, Gazprom, Irkutskenergo, Svyaznoy, Ecookna, Coca-Cola, Danone, Nestle2.

Konstantin Fedorov, development director of PAKK company, Moscow. 
 CJSC "PAKK" Field of activity: consulting services, professional assistance in business development. Number of personnel: 64. Average annual turnover: about 110 million rubles. Implemented projects

: more than 1000.

Cost optimization during a crisis is inevitable. But first, let's list the objective signs of the crisis. After all, as you know, it can simply be in our heads.

• Signs of a crisis:
• Customers are very sensitive to discount promotions
• There is a general decline in sales among market participants
• Descending in funnels Reduced
• average bill
• Buyers are constantly delaying payment

Counterparties' needs priorities change

All these signs must be present simultaneously, and not separately. If your average bill has fallen, this does not mean that the crisis has hit the entire industry. Look for the reason in yourself: in scripts, personnel, channels.

New opportunities

If a crisis is nevertheless diagnosed, look more cheerful. New opportunities are opening up. To use them, you need to understand very simple rules. 1. The crisis is best time

to reduce costs. You have no idea how many unnecessary “unnecessary things” you have been doing all this time.

2. The market is freed from ineffective companies. At the same time, their audience is not going anywhere. And sooner or later it will resume its consumption. It just needs a different approach.

3. During a crisis, suppliers become more accommodating. The discounts are bigger, the delays are longer.

Anti-crisis strategies

Anti-crisis strategies, which also include elements of cost optimization, include: transition to new markets and niches, “collapse,” increasing volumes and operating efficiency.

1. Transition to new markets and niches. Niches can be found at lower and higher levels. In a crisis, it is preferable to take the one that is higher. In the premium segments everything is always calmer, and the costs are lower. If the specifics of your business allow you, you can look for clients outside the country of business. 2. Collapse. This strategy is aimed exclusively at cost optimization. As part of this, you should understand which areas are profitable and which require additional investment. Freeze everything for a while investment projects

3. Increase in volumes and efficiency. To achieve this, you need to spend money on and, having correctly configured it for yourself, automate most of the processes. Double the load. During a crisis, there are fewer problems with personnel. Constantly monitor conversion in such sections of the funnel as product, employee, channel, the target audience, territory.

When economic situation doesn't work out in the best possible way, and the company's prospects look rather gloomy, most managers first of all strive to start optimizing and cutting costs. They are ready to tighten their belts and give up everything without which their business can survive at least for some time.

But here you should act extremely carefully. For optimization to take place without bad consequences, some costs can indeed be abandoned completely painlessly, some are better left untouched, and some costs need to be increased altogether.

The owner's task is to redistribute the company's resources. Otherwise, as soon as the situation improves, costs will creep up again.

Don't forget that company expenses directly affect profits. And the better their optimization, the greater the chance that you will be left with money. First, understand what you are spending your finances on -. Then rethink what you are striving for - . And then take on cost optimization.

There are 5 areas that need to be developed, even if the company is doing very poorly.

Economic security companies. No matter how high the costs of risk elimination, auditing and risk management are, if your company goes bankrupt, you will lose even more.

Incentives. During difficult periods, your company will need new ideas to optimize business processes and increase efficiency more than ever - so generously reward everyone who voices them.

Business development and renewal. Despite the crisis, the business world does not stand still - which means you shouldn’t lag behind if you don’t want to be left behind.

Marketing. Unless you plan to shut down your business once the economy improves, you shouldn't stop exploring the market or developing and introducing new products. Cutting costs in this area could cost you dearly in the future.

Human resources . No matter what happens in a company during a crisis, the problems cannot be solved without good employees. It is not correct to understand optimization as saving on salaries of key employees, as well as on training and advanced training of personnel.

The survey results show that the priorities of the majority successful companies during a crisis, they are not at all focused on cutting costs - 80% of respondents believe that even in conditions of economic instability it is important to develop the company and increase its efficiency. This is the main secret.

In general, when managing expenses during a crisis, you should not rely only on a pre-drawn up budget. The company's costs require “manual” adjustment - studying the feasibility and effectiveness of each cost separately. When concentrating on cost optimization, it is worth balancing strategic goals companies with current tactical needs - this is the only way to find a middle ground and avoid overspending.

In a crisis, you can not only optimize costs, but use various tools of an “offensive” nature.

Chatbots

A chatbot is a virtual interlocutor that can perform a variety of functions. Externally it may look like:

1. answering customer questions;
2. mailing on topics of interest to potential buyers;
3. express consultation;
4. answers as part of post-sales support.

The deep essence of a chatbot, however, is to segment leads and move them through different funnels depending on the stated need. In addition, a chatbot, even if it cannot completely replace the sales department or support department, will definitely allow them to be reduced in number. And this in turn will lead to cost optimization.

Franchise

If you want economies of scale, you need a network. Partially optimize opening costs retail outlets, and even a franchise will help you earn money on royalties. There are several points to consider.

1. Product. It should be, as they say, on trend and have bright packaging. It is desirable that it belongs to a category of goods or services that have a short transaction cycle and the potential to increase the average check due to organic upsells. In addition, you must make it clear to your franchisees who, where and when buys the product.

2. Support. It manifests itself in the form of monitoring and analyzing franchisees’ performance, advising them (possible through instant messengers), as well as organizing sales-stimulating events - competitions, publishing sales reports in general groups or chat bots.

3. Tools. Provide franchisees with all the necessary technological tools that automate the business and make it transparent for analysis.

Another player

Cost optimization during a crisis is possible if you involve the head of the department () in sales. This will add a player to your team. In addition, his participation in closing deals along with his entire team will significantly raise his authority and make him a true leader.

In any case, whether a crisis has occurred or not, the ROP can effectively manage subordinates if:

• analyzes mistakes of managers and helps to correct them;
• corrects scripts
• helps his subordinates close “difficult” clients;
• is constantly in the thick of things and does not distance himself from the sales process.

What to cut

Cost optimization should not harm your business. If you fire most of the managers, who will sell? To begin, analyze and highlight:

• Basic expenses necessary for the operation of the enterprise (salaries, taxes, purchases, etc.)
• Important (utilities, office fees, communications)
• Possible - these include additional social programs, benefits for employees
• Replaceable (for example, a charter flight for an executive can often be replaced with a regular one)

Thus, it becomes clear that cutting costs on the first two points is fraught with disruptions in the company’s work. As for possible expenses, during a crisis they should be abandoned, explaining to the staff that when the situation stabilizes, the issue of returning to social programs. Accordingly, it is possible to provide more economical options in the last item of expenditure.