Cost management as a guarantee of effective operation of the enterprise

The results of the financial and economic activities of the enterprise determine, first of all, the costs, and it does not matter what activities the company does, what organizational and legal form it has. It is the amount of costs that is the determining element in the analysis and calculation of key performance indicators. Therefore, it is important that the management of costs in an economic entity is a single and maximally coordinated process. It assumes the existence of control over the emergence of costs even at the stage of planning financial and economic activities. In addition, business processes must be structured to manage costs in the enterprise. This allows you to enter control into the system. It should be noted that it will determine the organizational structure of the entire enterprise.

Not always the enterprise needs a cost management system. It will be effective only if it can have a real impact on the company's performance, that is, when the goods, products and services of the enterprise are profitable.

Cost management, among other things, must take into account the nature of costs. They can be both external and internal. Experts in the field of cost management advise, first of all, to reduce external costs (raw materials, materials, interest on loans, etc.), since they are much less flexible than internal ones (labor remuneration and general economic expenses). In addition to the above classification, costs, depending on the volume of output, are conditional-permanent, conditional-variable and mixed. Typically, for cost management, a method is used, such as calculating, which can be performed either by elements or by costing items. The management of costs at the enterprise can be carried out through a variety of methods of strategic and operational management. Everything depends on the management objectives and, of course, on the availability of the conditions necessary for their application. The control method is an algorithm of actions. Managing costs using ABC analysis has become quite popular. The essence of it is as follows: costing for functional types of enterprise activities, for example, in production, marketing, sales, etc., is costed. Thanks to this, you can see not only the cost of goods, but also what level of costs are accounted for by certain business processes.

It should be noted that factor analysis must occupy an important place in cost management . It allows to determine the main cost-creating factors, as well as the degree of their influence on the total cost and dependence among themselves. This makes it possible to manage the costs of quality assurance in the long run, and also to have a direct impact on the total costs of the organization.