What Is Cost Control?

Cost control is the work of ensuring that costs are within budget estimates. Detect actual costs based on estimates, mark actual or potential deviations, make predictions, and provide measures to keep costs in line with goals. It mainly includes: (1) monitoring the implementation of costs and detecting deviations between actual costs and plans; (2) including some reasonable changes in the baseline cost; (3) preventing incorrect, unreasonable, and unauthorized changes Baseline cost; (4) Notify project parties of reasonable changes. In cost control, it must also be combined with its scope control, schedule control, and quality control. ^[1]

Cost Control

(Management behavior)

The process of cost control (Cost Control) is the process of calculating, adjusting, and supervising the various expenses incurred by the enterprise during the production and operation process using the principles of system engineering. It is also a process of discovering weak links, tapping internal potential, and finding all possible costs The process of pathways. At the same time, it is also the financial and taxation difficulty that Linked-F focuses on. The scientific organization and implementation of cost control can promote the improvement of management and transformation of enterprises

The main body of cost control recognizes from the organizational structure of the enterprise, which is divided into three types.

• Decision-making subject: Senior managers who determine the cost-generating methods and overall goals of the enterprise. They are responsible for making decisions about the cost-controlling schemes of the enterprise.

• Organizational body: It is the control body responsible for organizing and coordinating the cost control of the entire enterprise according to the results of cost decisions, implementing specific implementation steps, division of responsibilities and control requirements, processing cost control information, and evaluating cost control results.

• Execution subject: It is the subject that controls the costs incurred by various departments, links, stages, and positions. All links and aspects involving costs and expenses have a control body at the implementation level.

The main body of cost control is related to the establishment of functional departments, division of responsibilities, division of levels, post settings, scale, management system, and so on. Generally speaking, the main actors of cost control include: relevant departments and personnel who control the scale of production factors. Because the factors of production are the cost of the company's products,

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

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The content of cost control is very extensive, but this does not mean that the power is used equally without any detail. Cost control should be planned and differentiated. Different industries and industries have different control priorities. The content of control can generally be determined from the cost formation process and

The cost control in the production process is to strictly monitor the various factors of cost formation during the manufacturing process of the product in accordance with the pre-established standards. If deviations are found, timely measures are taken to correct them, so that resources in the production process Consumption and expenses are limited to the range specified by the standard. The basic working procedures of cost control are as follows:

Although the control objects are different and the requirements of control work are different, the process of control work is basically

Consistently, it can be roughly divided into four steps:

(1) Determine the control standards, that is, determine the standards for evaluating work performance. Managers should use the plan as a basis for developing the standards needed for control.

(2) To measure the effectiveness of the work, that is, to collect the actual work data (the corresponding elements in the established control standards) through the management information system to understand and grasp the actual situation of the work. In this process, special attention must be paid to the quality of the information obtained, so as to ensure the accuracy, timeliness, reliability, and applicability of the information.

(3) Analyze the measurement results, that is, compare the actual work results with the standards, find out the deviations and analyze the reasons for them, and prepare for further management action. This is the part of control that requires the most sane analysis, and whether further management action is needed depends on it. If the analysis results show that there are no deviations or only "healthy" positive deviations, the controller does not have to take the next step, and the control ends here.

(4) Take management actions to correct deviations. There are two ways to correct deviations: either improve job performance or revise standards.

First, start from the aspect of high cost

Controlling costs is of course to control the entire cost of the product, and to control the cost from the entire process of cost generation, including design, procurement, manufacturing, marketing and management, within the scope of corporate cost control. However, if enterprises control costs regardless of their importance, comprehensiveness, and indiscriminate efforts to control costs, the results often achieved may not be good. The cost is briefly divided into several aspects such as material costs, labor costs, and management costs. Depending on the product of the enterprise, the proportion of each cost in the product cost may vary, but in general, the cost of materials The proportion of product costs is relatively high, generally accounting for 60% to 80% of the share, labor costs account for a smaller share than materials, generally accounting for 5% to 10%, other costs account for 10% to 15%, corporate cost control The first is to control the main aspects of costs. Starting from materials and labor that account for a high proportion of costs, as long as you firmly control the parts that have a high proportion of costs, the cost plan of the company will generally not be broken. The goal of control is also easier to achieve.

Start with innovation

First, from a management perspective, companies do not pay enough attention to finance, which will inevitably lead to financial disconnected from the actual cost control.

The modern enterprise management system requires that in enterprise management, planning, coordination, communication, and control, the facts show that management has become the first lifeline of an enterprise. Development, financial management as an important part of business management, but in reality did not play its due role. Cost savings and control directly affect the success or failure of the state-owned old brand enterprises. Therefore, the most important issue is that the managers and decision makers of the enterprise should set about solving the problem of financial disconnection from reality, attach importance to finance as an important task, and play the role of the financial department. An old state-owned brand enterprise, no matter which department it is, is reasonable as long as it exists. It is an important part of the company's organic system. It is necessary to put the emphasis on practicality. It can be said that every department of the company is serving profit, and profit is the first vitality of the company. No matter what the job is, it cannot be separated from the profit of the company, otherwise it should be abandoned. The pursuit of corporate profit maximization is the same for foreign companies, private companies, and state-owned enterprises.

Second, improve the quality of financial staff, improve the practical operation ability of financial staff, and improve the professional skills of accounting staff.

There is no doubt that high-quality talents are a huge resource for enterprises, and talents have become the first capital of enterprises in the new century. Therefore, improving the quality of accounting personnel is an important issue at present. Without high-quality cost accounting, cost accounting and control will become a slogan, which will cause problems in actual operation. First, strengthen the training of accountants. Training is more than just learning in the classroom. As our construction company, accountants should often go to the construction site for site inspections. Those who have experience and drive inexperience will find problems in practice and take them to the field to learn. Secondly, encouraging accountants to strengthen their studies and make efforts to enable accountants to obtain junior, intermediate and senior titles. In the course of taking the intermediate accounting technical exam, I found that the content of the exam is mainly based on the accounting of industrial enterprises. It can be said that in actual work, the knowledge of books can not really be used, but the accounting system is compatible, as long as Really learning, it is extremely helpful to the understanding of the work of our construction enterprises. When encountering practical problems, it is easy to propose solutions to problems through the accumulation of knowledge and experience. The purpose of learning is to better Work services.

Third, cost control is not just a matter of accounting personnel. Cost savings and control need to be top-down with the participation of all employees.

In terms of cost control, the company's material actually accounts for a large proportion. Therefore, strengthening the control of materials has become the primary problem. The construction site has a large working surface and difficult management. This requires all employees to increase cost awareness. Leading front-line migrant workers, let everyone realize that cost savings are related to the vital interests of each member. While improving cost awareness, there must be a strict assessment system and a reasonable reward and punishment system. Facts have shown that the reward expenditure is much less than the loss caused by waste. Of course, rewards and punishments are not the purpose. We must slowly cultivate the awareness of staff savings . ^[2]

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