Variants Which May Cut Costs

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Table of Contents

Introduction
How to reduce costs
Conclusion
Reference List

Introduction

Still, it is impossible to save too much if to pay attention only to such options as electricity, gas and water. The consumption of these facilities should be reduced to minimum in order to pay less, still some specific actions should be taken into account. High attention to the recent automotive technologies with the purpose to reduce costs of gasoline is a good opportunity for the company, still, it may cost too much initially, as the company would have to buy new vehicles to replace the previous ones. The idea to sell previous vehicles may reduce the costs on purchase the new ones.

How to reduce costs

One of the greatest challenges each company faces is managing human resources. To reduce costs on managing human resources, it is important to employ only professionals and those who want to learn and be useful to the company. Human resources are considered as a short-term variable costs, but they are mostly observed now as the key to company’s long-term functioning. It is important to understand human resources as “long-term assets rather than expenses” (Crandall, Wallace, Buchholz & Crane 2002, p. 10).

It has already been mentioned that the company spends about 70% of its revenue on salaries. There are a number of techniques which may help reduce these costs. First of all, the company may reduce some staff to part-time status. The employees will be able to combine jobs and apply their skills in other professions. Second, the company may change the status of the workers. Being a regular worker, the company may try to shift him/her to contractual status. This status includes both part-time and full-time opportunities. Third, there are employees who are necessary o the company, but which responsibilities may be reduced to minimum.

The periodical necessity in these people may help the company reduce their time spent at the workplace and the limitation of the salary as well. It is obvious that such kind of organization has some hot periods when the possibility of fires is too high. It is unnecessary to keep the staff the whole year to meet the employee necessity during such hot periods. Temporary employees may be provided with special assignments for restricted period of time (e.g. 3-5 months). Thus, these alternative arrangements of working with human resources may help reduce company costs (Crandall, Wallace, Buchholz & Crane 2002).

A number of other variants which may help cut costs are connected with accounting best practices. Being a big company, the accounting requires much attention. Still, using the best practices offered by Steven M. Bragg (2010) some costs may be either cut or reduces to such level that they may remain invisible and imperceptible for the company. First of all, paying taxes, the company may try to extend the payment period (if possible) that will allow it to “wait an additional period until the monthly procurement card statement arrives before making a payment” (Bragg 2010, p. 12). Modern system allows accountants to reduce the reviewing of number invoices and checks that cut costs as well. The reduction of different transaction is possible if to make everything systematically (Bragg 2010).

Conclusion

So, it may be concluded that there are many different ways how costs may be cut. It is just important to pay attention to the specifics of the work organization and performance. The innovative technologies and a number of other practices may help the company review the functions performed by different people and make their work effective and productive with the lower level of costs.

Reference List

Bragg, SM 2010, Accounting Best Practices, John Wiley and Sons, New York.

Crandall, NF, Wallace, MJ, Buchholz, BB & Crane, M 2002, The headcount solution: how to cut compensation costs and keep your best people, McGraw-Hill Professional, New York.

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Variants Which May Cut Costs

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