Cost Control Startegies Flashcards
The practice of identity and reducing business expense to increase profits and it starts with the budgeting process
An important factor in maintaining and growing profitability
Cost control
Can calculate the net pay and tax withholdings for each worked, which saves the employer time and expense
Payroll tax
What is the goal of using cost control
To enhance a projects financial performance while decreasing the projects costs.
What are the importance of cost control
Budget helps to stay on track
Keeps the projects cost from growing
Keeps the profitability high
Cost control methods often involve setting a strict budget for a team to follow, which is helpful with staying on track during the project. If the budget calls for a project to be completed by a certain time, employees may feel more compelled to complete the project by the budgets deadline
Budget helps to stay on track
Using cost control methods can help keep a projects cost from rapidly growing as the project progresses. Project members can consult a financial professional if they feel the budget doesn’t cover enough costs needed for the project
Keep the projects cost from growing
Cost control methods allow for the revenue brought in from the projects to be higher than the cost of the project, which keeps the profitability high and increase a company’s finances
Keeps the profitability high
What are the factors of cost control
Cost of labor
Cost of materials
Actual cost
Cost variance
ROI or return on investment
The sum of wages paid to employees working on a project, including employee benefits and taxes
Cost of labor
The total cost of all supplies and equipment required for a project
Cost of materials
The total expense that a project has cost from the beginning of the project to end
Actual cost
Refers to any differences in price between the actual cost of the project and the budget you have set
Cost of variance
How profitable a project is compared to how much money you invested in a project
ROI or return on investment
What are the five cost control methods
Planning the budget properly
Monitoring all expenses using checkbox
Using change control system
Having time management
Tracking earn value
Setting aside enough time to develop an accurate budgets for new project is important because budgeting helps estimate costs, keep finances organized and ensure the cost variance is relatively low
Planing the budget properly
Businesses often have checkpoints that are analyzed periodically throughout a project to review that team members are maintaining the budget and to decide if there are any changes that need to be made
Monitoring all expenses using checkpoints
Monitoring all changes made to the project to ensure professionals make adjustments to the budget. They also document changes and ensure all changes being made are vital to the project
Using change control systems
A cost control method that can keep the expenses of Project down by meeting project deadlines
Having time management
Helps professionals predict the financial outcome of a project depending on the time to complete the project, the total expense of the project and the overall cost of the project
Tracking earned value
