INTRODUCTION FOR FINANCIAL MANAGEMENT AND COST SAVINGS STRATEGIES
In today’s changing business conditions and intense competition, there is a need for all functional or business heads to prudently manage, ascertain and implement cost saving and reduction strategies, especially during tough business times.
Businesses that don’t control their costs don’t stay in business. How well are you doing? Is everyone in your organisation sufficiently aware of costs, managing them effectively and maximising opportunities to reduce them? If there is scope for improvement, this course will help get you back on track. It will demonstrate that cost reduction is so much more than cost control and cost cutting. True cost management is about being aware of costs, seeking to reduce them through good design and efficient operating practices whilst taking continuing action on overspending.
Who should attend: Professionals, Senior & Junior Executives who had profit center responsibilities and all levels of employees who assist and implement cost saving and reduction strategies.
COURSE OBJECTIVES
On completion of the programme, participants will be able to:-
- Interpret financial reports, example cost variance analysis report to focus and formula cost reduction strategies.
- Being aware of costs at all times
- Seeking cost reduction from the start (including life-cycle costing)
- Understanding real budgeting techniques such as Activity Based Costing (ABC).
- Ensuring cost reports lead to action
- Managing a cost reduction process that delivers
COURSE CONTENT
The key content of the program include the following:
Understand the sources of value creation as key strategy in any cost saving initiatives
Understand value generation and value destroying activities
Identify firm’s cost drivers for cost reduction.
Understand nature and behaviour of costs – fixed, variable and semi variable cost
Interpret and apply breakeven and contribution analysis in new products launch profit and loss analysis.
Introduction – the cost management process
- The risks of poor cost control
- Capital and revenue costs
- The importance of cost awareness
- The importance of cost reduction
- Cost management – the key aspects
- How to build a cost management and control process checklist for your areas of responsibility
Cost removal – taking out costs
- Cost awareness
- Costs of poor design / poor processes
- Value engineering
- Removing redundant costs
- Cost reduction culture
- The need for cost reports
- What measures can be used to identify over-spends as early as possible
- Cost control performance measures and ratios.
Cost Management tracking tool: Variance Analysis tool
- Understanding essentials of variance analysis & how variances are calculated in cost management
- What causes cost variances?
Cost reduction process impact to the profitability
Understanding of cost
- Cost element classification
- Value Costing
- Costing methods and structure
- Identify firm’s cost drivers in Activity Based Costing (ABC)
- Different types of cost – fixed, variable
- Application to cost reduction strategies
