Commercial expenses in the cost price of production are the sum of all expenses incurred by the organization during the production and promotion of products. Cost price always has a monetary value. It estimates the price of a unit of goods and is included in the costs of the enterprise.
There are a number of universal and well-known ways to reduce cost:
increase labor productivity;
expand specialization;
automate work operations and introduce modern equipment;
introduce a saving mode in each of the areas;
expand and merge companies;
take a rational hungary email list approach to choosing carriers, suppliers, and partners;
save raw materials, energy, fuel, materials;
reduce the costs of maintaining the administrative apparatus;
modernize technologies;
improve marketing, regularly conduct market research, use modern methods of product promotion;
reduce the number of defective products.
If you want to reduce your cost price, first develop an action plan and specify the exact percentages of cost reduction for all items.
When preparing mitigation measures, be sure to include:
the planned percentage reduction in direct production, general production and general business costs per unit of goods and the costs of its promotion;
a list of specific measures to reduce costs, as well as deadlines and employees responsible for their implementation;
the net result obtained from all points separately in monetary terms.
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Method 2. Reducing costs for specific items
This method is used after analyzing all cost items of the balance sheet.
At the same time, we must not forget how cost reduction can affect the financial results and activities of the enterprise.
Outsourcing, combining positions, and control over payment for production downtime caused by the manager will help reduce the cost of maintaining employees. Reducing expenses on using equipment can be effective if top management pursues the right policy at the enterprise, for example:
to decommission and lease out unused machines, mechanisms, transport, and warehouses;
choose organizations that provide high-quality maintenance to avoid significant costs for major repairs in the future;
reduce downtime;
introduce sale and leaseback and take other measures.
It is possible not to lease, but to immediately sell unused equipment, transport, premises, which will also lead to a reduction in expenses. Key assets with 100% depreciation are usually not sold, but written off or transferred to the company's employees for a fee, which increases unprofitable items of commercial expenses.