Deficiencies In Cost Management And Control

Most small and medium enterprises in China usually have a serious shortage of their own funds. Generally, there will be behavior of raising funds. However, when many small and medium-sized enterprises raise funds, they will mainly consider how to use funds, or the cost of raising funds. They often do not consider the impact of such measures on the capital structure of enterprises. Whether the capital structure of an enterprise is reasonable or not will directly affect the survival and development of the company.

When raising funds, even the profit brought by the investment project is less than the interest of the loan. If we still borrow money blindly, it will lead to a serious rise in the company's financial cost, and a decrease in the profit of the company, or even a loss.

For most enterprises, the rate of return on investment is high enough to decide whether or not the project will start.

However, in order to get an ideal return on investment, the new project is not only based on the merits of the project itself, but also on its accurate cost accounting and product pricing. If there is a problem in the cost accounting, it will affect the sales and profits of your product.

The problem is often here - some small or startups like to do the simulation based on experience, to find out the cost of the project, and then add a little profit to the price of the product.

What is allowed by theory often faces challenges in reality. Many projects will have unexpected cost costs in the implementation of reality, which may cause difficulties in the operation of enterprises, and some may even lead to the rupture of capital chains. These Hidden Cost, which are often overlooked, will often affect the survival and development of enterprises.

There may be various expenses in the process of operation and management. According to the regulations, these expenditures should be controlled within the scope of cost expenditure, and should also be carried out according to the corresponding expenditure standards.

But many times, enterprises do not carry out more stringent examination, nor do they have strict control. Sometimes they will mistake some costs to the cost, increase the cost, lead to high cost, and reduce the assets, thus hindering the smooth implementation of the cost plan.

So it is very necessary to calculate the hidden cost correctly and timely. This is also one of the key points of cost accounting. Therefore, the financial staff of an enterprise should calculate the actual cost of the product accurately and accurately, and provide these useful information for the management activities.

According to their own characteristics and the requirements of cost management, enterprises can work out a way to calculate the cost suitable for the development of enterprises, and calculate the total cost of products and the cost of units. Then, according to the data of cost accounting, we can make a report on cost.

Chinese enterprises usually have a weak sense of cost management, especially small businesses.

It is usually reflected in the lack of necessary understanding of the purpose, scope and means of cost management.

At the same time, the general division of labor in the enterprise is clearer and the employees perform their duties. This will also lead to a general lack of sense of cost management, so the cost of coordination in the management of enterprises will increase.

For a long time, most enterprises have not accurately positioned the functional departments of cost control. They often put all the responsibilities of cost management in the financial sector, thus neglecting the synergy of all departments and employees. As for the management and control of costs, it seems that they should be considered by the leadership. Ordinary employees are generally lack of awareness of cost management and control, resulting in a lot of waste. It is precisely because of this reason that it hinders the success of cost management and control.