On enterprise cost control and cost management

Cost control and management are the basic ways for enterprises to obtain good benefits in the process of production and operation. It runs through the whole process of product development, production and sales, ensuring product quality and reducing product cost. However, enterprise cost control and management is not simply to reduce costs, but should be based on the overall development strategy of the enterprise and proceed from the actual situation of the enterprise itself, and constantly investigate, study and plan, so as to maximize the profit of the enterprise.

First, the current enterprise cost control and management problems

Due to the influence of economic system and other factors, Chinese enterprises do not pay enough attention to cost management, which makes Chinese enterprises at a disadvantage in market competition. On the one hand, the internal management of enterprises pays too much attention to the control of production costs and ignores the control and management of operating costs. On the other hand, it fails to comprehensively manage the costs before, during and after the event, and it is impossible to form a joint force of cost control.

(A) excessive cost reduction

In order to reduce costs, some enterprises simply control costs by cutting expenses and lowering the grade of raw materials. This practice can indeed reduce costs in a certain period of time, but in the long run, it is tantamount to self-immolation. Because an enterprise wants long-term development and long-term benefits, it must stand the test of the market. Therefore, controlling costs by reducing product quality is a way to meet immediate interests at the expense of long-term interests, which makes products lose credibility and becomes an obstacle to the growth and development of enterprises.

(b) Simplifying internal controls

For many enterprises, the internal control is placed on the after-the-fact audit of the financial department, focusing on the violations revealed by the financial audit, while insufficient attention is paid to the efficiency audit and internal control audit, which makes it difficult for enterprises to find the existing problems, which is one of the reasons why enterprises are difficult to grasp the benefits.

(C) Distortion of cost information

Driven by bad interests, managers of some enterprises in China evade taxes, seek personal gain, whitewash performance, and adjust and modify cost information at will, resulting in distortion of cost information, which leads to the reduction of cost-based management activities and efficiency. At the same time, due to human factors, the adjustment of cost figures causes distortion of cost information accounting and makes enterprises lose money.

(D) Cost assessment is not in place

Most enterprises in China have not established a complete budget and responsibility management mechanism, and have not formed a cost assessment system. Therefore, this not only leads to the failure to implement the responsibility of production management and the ineffectiveness of the responsibility management system, but also makes the cost management of implementation lose its own significance.

Second, measures to improve cost management

If an enterprise wants to exchange the minimum consumption for the maximum modern profit, it must do well in every link, use modern management technologies such as computers, and do well in strategic, quality and refined cost management.

(A) to strengthen strategic cost management

Strategic cost management is to study and analyze every link that affects the cost, and find out the methods to reduce the cost and the reasons that affect the cost. There are two aspects of cost drivers, one is the cost drivers related to production activities, such as the number of times to move inventory; The second is the motivation related to the strategic cost of the enterprise, such as technology, scale and human resources investment. , which has a great influence on activity-based cost and strategic cost. Therefore, enterprises can manage the strategic cost from the motivation, adopt appropriate strategies such as speculation scale and research, effectively reduce the strategic cost and avoid the cost waste in the operation process.

(B) improve the quality of cost management

Quality cost management is mainly the management of identification, prevention, internal and external defects and other costs, including cost benefit and quality cost control.

Systematic and comprehensive quality management, so enterprises should expand the scope and establish a quality management system to combine it with cost management and link it with economic benefits. First of all, we must understand the habit of quality cost, and different projects are controlled in different ways; The second is to implement quality cost management to every employee and conduct total quality management. Only in this way can the cost management of technical and economic integration be established.

(C) Improve refined cost management

Fine cost management can effectively control the use of expenses, because fine cost management is standardized and quantified by numbers. Fine cost control can control controllable expenses (such as water, electricity, personnel, etc. ) and uncontrollable expenses (such as interest, raw material procurement, sales expenses, etc. ), explain the cost overrun requirements of relevant departments, let each department put forward relevant control methods, establish incentive mechanism, and promote the effective implementation of refined management.

(D) improve the cost information management

The development of modern science and technology provides a modern tool for the processing of enterprise cost management information. Applying computer technology to enterprise cost management can greatly improve the process of enterprise modernization management. They do not need programming, are flexible and convenient, have low use cost and high efficiency. Using these softwares, managers can make predictions and decisions conveniently and quickly, and can monitor and analyze the control process, which has achieved good results.

Three. Concluding remarks

Any cost management method is not static, it will change with the development of society and the change of environment. Therefore, it is necessary to study the cost management mode with the concept of development and constantly innovate the cost management mode to meet the needs of the development of the situation.

References:

[1] Chen. Enterprise cost management strategy [M]. Lixin Accounting Publishing House, 2006.

[2] Cao Wenqing. The Role of Cost Management in Enterprises [J]. Cooperative Economy and Technology, 2004( 18):52-53

Enterprise cost control paper II

On the cost control of enterprise procurement

According to the provisions of the Ministry of Finance's Procurement and Payment of Enterprise Specific Internal Control, and combining with the actual working experience of enterprises, this paper introduces the businesses in all aspects of enterprise procurement and the relationship between each business and procurement cost. This paper expounds the influences of purchasing plan, supply chain management, purchasing price, payment policy and function setting in purchasing management on controlling purchasing cost, and puts forward better management ideas for enterprises to control purchasing cost and finance.

key word

Enterprise procurement; cost control

In June, 20001year, the Ministry of Finance issued the Basic Standards for Internal Accounting Control (Trial) and a series of specific standards, which played a certain guiding role in enterprise management. According to the changes of economic development situation at home and abroad, and drawing lessons from international advanced experience and practices, in May 2008, the Ministry of Finance and other five ministries and commissions issued Basic Standards for Internal Control of Enterprises and Supporting Guidelines for Internal Control of Enterprises. From 20 12 1, all companies listed on the main board of domestic exchanges must implement new internal control standards, conduct self-evaluation and introduce external audit. The state puts forward internal control management requirements for enterprises from the perspective of macroeconomic operation. Enterprises need to combine their own characteristics, have a deeper understanding and innovation, reference? Norm? And then what? Guidance? Requirements, but also in line with the interests of enterprises, but also practical and operable. At the same time, in the current economic cooperation relationship that advocates * * * win-win, only by fully considering the interests of all partners can enterprises be more competitive and sustainable. Based on the inspiration and working experience of "Guidelines for Enterprise Internal Control", this paper briefly discusses the control of enterprise procurement cost.

The business process of enterprise procurement mainly involves the following links: drawing up demand plan and procurement plan, selecting suppliers, determining procurement price, concluding framework agreement or procurement contract, managing supply process, acceptance, return, payment, accounting control, etc. In the above links, the procurement cost is generally manifested as the storage cost of planned procurement and the price cost paid. In addition, the procurement cost should also include the stability of the supply chain, the strength of supply security and other factors. Suppliers are important partners in enterprise development and should be regarded as an extension of enterprise product production. Establishing mutual trust and strategic alliance with suppliers is an important strategy to improve core competitiveness. On the one hand, the purchaser hopes to continuously strengthen the interaction between suppliers, improve the integrity, initiative and enthusiasm of suppliers, get strong support from suppliers in terms of quality, service and technology, and get loyal cooperation from suppliers. On the other hand, in the sense of controlling the purchase cost, the purchaser wants to pay the lowest purchase price. Under the premise of the purchaser's greatest expectation of cooperation, the procurement cost control must be based on a win-win situation with suppliers, and the focus of procurement cost control is procurement plan and supplier management. It is further understood that the core of procurement plan is on-demand procurement, and the core of supplier management is procurement payment commitment. As long as the purchaser grasps the core point, the procurement cost control can follow the trend and realize its maximum expectation.

I. Procurement Plan and Storage Costs

Purchasing plan is the combination of purchasing and planning, and it is the most basic management activity of an enterprise. The goal of purchasing is to deliver materials to the right place at the right price, in the right quantity and at the right time. The purpose of planning is to determine the output, inventory and material demand of each period according to the demand forecast of each period in the known planning period, with the goal of minimizing the cost in the production planning period. In enterprise practice, the demand department generally puts forward the material demand plan to the purchasing department according to the needs of production and operation. After the purchasing department classifies and balances the existing inventory materials according to the demand plan, it arranges the purchasing plan as a whole, and implements it after being approved according to the prescribed authority and procedures. When the plan is unreasonable and purchases at will, the inventory occupation will generally increase. First, the total amount will take up too much. Second, the production of sluggish materials will lead to inefficient inventory operation. Enterprises will also invest more purchasing funds, increase the cost of capital, and even cause late losses such as sluggishness, expiration and scrapping.

Solutions generally include: improving the accuracy of production planning and procurement planning forecasting; Reduce the uncertainty in procurement; A reasonably designed safety stock; Strengthen real-time communication between procurement and production, procurement and planning; Design scientific purchase batches and purchase batches according to the actual situation; Use information management tools, such as ERP system for inventory and planning management; More importantly, it is necessary to strengthen the stability of the supply chain and timely delivery.

Second, supply chain management and procurement costs

The fragility and insecurity of supply chain will cause supply interruption, supply delay, supply failure, supply quality and cost, and have a series of chain reaction effects on enterprise cost control. Therefore, the selection and cultivation of suppliers and their daily management are very important.

1, supplier training

Enterprises should make a catalogue of purchased materials, which is divided into one, two and three categories. One is the key materials and parts with special quality and technical requirements, the other is the important materials or parts with certain quality and technical requirements, and the third is the general and unimportant materials. In order to ensure the safety of the supply chain, there are generally no less than two or three suppliers of important materials. The purpose of supplier training is to communicate and audit suppliers who are willing to cooperate in a planned and systematic way, so that the products they provide can fully meet the demand. It is hoped that the two sides will cooperate for a long time and become a stable and reliable supply chain in the future. The procedures for cultivating suppliers generally include: investigation, inspection, supply performance, performance, market performance, testing of samples provided by suppliers, trial production and trial use in small batches, trial tracking, confirmation and joint evaluation of test results. Only after a series of verifications can a primary supplier become a qualified supplier.

The current market competition is not business-to-business competition, but supply chain-to-supply chain competition, that is, the competition between the entire alliance of enterprises. When choosing a supplier, its cost assurance ability includes cost management ability, cost control, cost reduction and maintenance, cost awareness and concept, cost information and sales price, cost advantage, etc. It is an important aspect to be studied. All enterprises in the supply chain are strategic partnerships and an inseparable part of the supply chain system. In terms of cost control, it is necessary to create an atmosphere in which the whole supply chain system implements total cost management. Enterprises must guide, demand and help suppliers to accurately control and reduce costs, and cannot force suppliers to blindly reduce product prices just to control and reduce their own costs, which is not conducive to the healthy and sustainable development of the supply chain.

2. Daily management of suppliers

Qualified suppliers should be evaluated and managed on a daily basis, and their performance should be continuously evaluated and encouraged. Generally, the evaluation is based on inspection batch, qualified batch, batch qualification rate, inspection quantity, qualified quantity, qualification rate, unqualified characteristics, overdue order batch number, on-time delivery batch number, on-time delivery rate, reasons for delayed delivery, supply price change, etc. The supplier share distribution is arranged in descending order according to the evaluation ranking. In general, the number one supplier accounts for 50%-60% of the total procurement, and the number two supplier accounts for 20%-30% of the total procurement; The third company buys less than 10%-20% of the total. During the management of demotion, the supplier's supply or limited purchase will be suspended, and the enterprise will communicate with the supplier and make improvement within a time limit. If the supplier fails to make rectification within the time limit, it may give a written warning and cancel its qualification as a qualified supplier. For the losses caused to the enterprise by the supplier's product quality problems, according to the agreement of both parties in the supply agreement, after verifying the loss amount, communicate with the supplier for confirmation, and the supplier will compensate. Organize supplier meetings regularly, praise outstanding performance, criticize and even warn poor performance, and encourage suppliers to make continuous progress.

Third, the purchase price and cost

Purchasing price is an important aspect of purchasing cost control, and it is also the focus of enterprise control. The methods of controlling the purchase price are relatively mature, generally including bidding (including open bidding and invitation bidding), price comparison, agreement, fixed-point procurement, etc. Enterprises can generally be effectively controlled as long as they formulate a sound procurement system, stipulate the management process of procurement price, use mature methods, and strictly implement, supervise and inspect.

Four. Payment policy and cost

Payment policy is a problem worth discussing. The support points of supply chain alliance are seller's service, buyer's payment and common interests, so payment policy is an important content of procurement management. Many enterprises contacted by the author, including large state-owned enterprises, lack strict commitment to suppliers' payment. Pay if you have money, delay if you don't, and even if you have money, there is no principle in the payment process. Under normal circumstances, you can't keep your payment promise. First, due to subjective factors, the payment authority is in the hands of individuals. If you are familiar with the relationship, you can pay on time or pay more, otherwise the payment will be slow or you will never take the initiative to pay when the supplier urges you; Second, objective operational difficulties, temporarily unable to pay. Credit payment means that the purchaser gives a promise to the supplier, abides by the payment term agreed in the agreement, and takes the initiative to pay when it expires. This commitment is an important means to strengthen the supply chain, which will promote the trust and loyalty of suppliers, change the management mode of suppliers, and have a positive impact on purchase price, signing and execution of framework agreement or purchase contract, supply process, acceptance, return, claim and accounting settlement. Default or even malicious default is a vicious circle and a dead end for all parties.

In the current macro-environment, many commodities are in the buyer's market, and many enterprises sell on credit because of competition, almost all of which do not owe or pay back, and the cost of debt collection increases, and bad debts are also common. Therefore, a good payment policy is very attractive to suppliers. For suppliers, there is too much debt and the operating pressure is getting bigger and bigger. Customers continue to ask for goods, so they can't help but give them. They want to maintain customer relations and get the payment back in time, and sometimes they have to practice favoritism for this idea. In this environment, when the supplier's input cost and repayment risk increase, these comprehensive costs will naturally be passed on to the supply price.

Of course, for many enterprises, it takes courage to promise the payment date and take the initiative to pay. When the sales payment cannot be recovered in time, it means that more loans will be used to advance the payment, but the significance of promising to pay on time is positive. The author is engaged in financial management, and commitment means bearing the pressure of not being able to guarantee timely payment. However, from the company's experience in operating credit payment in the past five years, it is considered that commitment and timely payment are an important strategic policy of the company. In the long run, it will promote management improvement and enhance competitiveness, and enterprise operation will enter a virtuous circle. The significance of credit payment lies in the following aspects: firstly, there are few domestic companies implementing credit payment policies. Enterprises can publicly promise the terms of credit payment to suppliers, show the sincerity of long-term cooperation with suppliers, gain the trust of suppliers, realize sincere cooperation, enhance the company's image and reputation, and form pressure on peer enterprises;

Secondly, after the strict implementation of the credit payment policy, the procurement department, the operation department and the financial department can restrict and supervise each other, which can eliminate the subjective factors in payment and put an end to fraud; Thirdly, it improves the cooperation enthusiasm of suppliers and stimulates more suppliers to compete for the shortlist, which is conducive to reducing the procurement cost, especially the suppliers will take the initiative to reduce the supply price to win the share; Fourth, the management of suppliers has been improved, and even the delivery date, supply quality and claim terms have been strictly enforced; Fifth, the efficiency of financial settlement is improved. Generally, in the case of uncertain collection time (many enterprises regard sales as realization and pay VAT only after issuing sales invoices), in order to avoid the burden of paying taxes in cash, they are generally reluctant to issue invoices before collection, while buyers generally require issuing invoices before payment in order to deduct taxes. With the promise of payment, this contradiction is solved, because the payment period is calculated according to the date when the finance department receives the purchase invoice.

Determination of credit payment period. Generally speaking, a framework agreement including payment terms should be determined with suppliers. Through negotiation, different payment credit periods should be set according to the supply type. For example, the payment period of general materials is set to 90 days, and the payment credit period of suppliers who are in short supply (limited by the seller's market) can be shortened appropriately, which can be divided into 60 days, 45 days, 30 days and so on. Credit payment shall be implemented after the signing of the agreement, and the credit payment period shall be calculated from the time when the invoice is credited to the buyer's financial account, and shall be available after the expiration.

Of course, the implementation of credit payment policy needs good capital turnover support, otherwise, the financial department will have no rice to cook. As long as the sales and payment of enterprises are relatively stable, and the income and expenditure of funds can be matched for a long time, the capital flow will be in a virtuous circle and the payment commitment will be guaranteed. Blindly increasing loans to support credit payment is not a long-term solution.

Verb (abbreviation of verb) Function setting in purchasing control

Function setting and supervision in purchasing control. Set up a special procurement department, responsible for supplier selection, framework agreement, payment cycle agreement, purchase price determination, supplier performance evaluation, supplier conference, supplier claim, supplier management, etc. Set up an operation department, which is responsible for making purchase demand plans, signing orders, receiving goods, managing safety stocks, and submitting payment according to the agreement. The finance department is responsible for supervising the implementation of credit payment and handling the payment for goods.

Ending of intransitive verbs

Purchasing management and purchasing cost control are systematic, and various factors influence each other. It is not enough to have a credit payment policy without perfect supplier screening, evaluation and daily management. Incompatible responsibilities must be separated and balanced. Grasp the key factors, the problem will be simplified, business development will be virtuous circle, and management will follow the trend.

refer to

[1] On May 22, 2008, the Ministry of Finance, the China Securities Regulatory Commission, the National Audit Office, the China Banking Regulatory Commission and the China Insurance Regulatory Commission issued the Basic Rules for Enterprise Internal Control and the Specific Rules for Enterprise Internal Control Procurement and Payment.

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