Managing company cost

Resising is a sure way to managing oversized clothes on a tight budget after weight loss. In the same way, many managers often opt for cost-cutting whenever a company faces financial challenges.
Cost-cutting is one of the approaches, which many managers apply in the face of tough economic times to rationalise costs.

It refers to measures implemented by an organisation to reduce its expenses and improve profitability. Such measures may include firing some employees, reducing staff pay, lowering monthly bills including airtime, and downsizing office staff.

But cost-cutting should be promoted alongside hatching plans for a possible rebound because there are costs you will not be in position to avoid. For instance, if you are getting goods and services on credit, there will be times when the suppliers will demand pay before any further supplies. Therefore, it is wiser to develop a culture of controlling costs in good times to manage better in bad times.

Therefore, prioritising revenue sources helps a manager to rally his or team towards strengthening the company’s financial muscle. He or she will analyse the revenue drivers and invest energy and resources to bolster the company’s earnings. If sales contribute more money, for instance, a manager can help the firm to benefit more when he or she facilitates that process in a conservative but candid spending way.

Once the lines of where money will come from are smartly and clearly drawn, the team members should be rallied and supported to exploit all possible opportunities.
It should be noted that cost-cutting can be detrimental to an organisation; it can lead to staff turnover due to poor staff remuneration.

It can also affect employee creativity and innovation, product quality and market share. The company brand will also be at stake when a manager puts emphasis on merely reducing costs.

The writer is a human resources expert and a journalist.
isaiahkitimbo@yahoo.com