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Cost management method is a method of enterprise cost management.Commonly used are: experience based cost management method, cost control method based on historical data, etc.
Cost management methods include: experience based cost management method, cost control method based on historical data, and budget based cost management methodTarget cost controlMethod, benchmarking based target cost control method, market demand based target cost control methodvalue analysisCost control methods.
If the enterprise adopts these six cost management methods comprehensively and skillfully, its cost can be reduced to a large extent.Although a few enterprises have used these six techniques or adopted several of the main methods, due to the impact and constraints of various implementation environments, they are not professional and handy, so their due effect has been greatly discounted.
The first two are mostly used in China,Activity Based CostingIt has just been applied in ChinaTarget cost methodIt is a kind ofmarket orientation (Market driven), a method of profit planning and cost management for products with independent manufacturing processes.The objective of the target cost method is to design the cost of products in the R&D and design (RD&E) stage of the product life cycle, rather than trying to reduce the cost in the manufacturing process.
budget management
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Budget based target cost control method
Among domestic enterprises, strictbudget managementIt is rare to see enterprises of.Although some enterprise managers know the benefits of implementing budget management from various channels, they always ask the financial department, or the sales department, or the“General Manager's Office”Such departments should make a budget for the coming year.
Because everyone knows a little about how to budget, the enterprise has not accumulated all kinds of data and correspondingOrganizational environmentThe budget they make is actually just a spending plan for the next year put forward by the budget maker after considering the leader's intention.And the people who make this plan usually know that this spending plan is just a way to meet the current requirements of the boss.In most enterprises, few people think that the budget will be useful, not that it is useless in theory, but that it is useless in their enterprises.
"The plan does not change quickly" can be understood in many ways.
One kind of understanding is that the boss himself will not do as he askedBudget implementationIt's no use budgeting well.
One understanding is that our enterprises simply can not make a feasible and effective budget.
Another understanding is that the interpersonal relationship is too complicated and there are too many people in charge. Even if the boss insists on working according to the budget, one person will destroy him someday.
Another explanation may be that environmental factors change too quickly and there are too many variables in the development of the enterprise, so it is impossible to predict what will happen in two or three months. Therefore, the budget cannot be made, and it will be impractical if it is done.
The experience of successful foreign enterprises shows thatbudget managementIt is an effective cost control method
The so-called budget, generally speaking, is to determine in advance how much to spend tomorrow?Where to spend money?Who will spend money?How to spend money?Who controls spending?To answer these questions, we need not only to be sure of the overall situation, but also to know where the funds come from, to ensure that we can get the funds, and to know the future price trend of various things that need to be purchased.Because we spend money according to plan, we will not spend money indiscriminately.Why is it that spending money according to the plan in advance will not cost money unjustly?Because the plan is usually discussed and negotiated in advance with the joint participation of all departments.
Of course, just as there is no absolutely good thing in the world.Budget basedTarget cost controlmethod.It is not 100% easy to use, because there are always some things that are unpredictable.But this cannot be deniedbudget managementOnce the budget is implemented, it is not monolithic, and can be properly adjusted when necessary.Most importantly, budget management is better than no budget management.[1]
