Reducing costs and increasing efficiency is a word, which means reducing costs and increasing benefits. Reducing costs and increasing efficiency should be people-oriented, and the interests of enterprises should be created by the employees. Therefore, it is necessary to follow the people-oriented idea of reducing costs and increasing efficiency

From the end of last year to the beginning of this year, Internet companies frequently reported the news of layoffs, and layoffs are undoubtedly the fastest way to reduce costs when income growth enters a bottleneck and net profit declines.

but from the financial point of view, we can't cut costs and increase efficiency across the board. We need to make a plan after careful consideration and implement it step by step.

then, from the financial point of view, what costs need to be reduced to reduce costs and increase efficiency? What is the increased efficiency? First of all, it is necessary to know what costs the enterprise has. From the financial point of view, the cost of an enterprise can be divided into variable cost and fixed cost. The variable cost is strongly related to income and will change with the change of income. When the income is 1, the variable cost is also 1. Fixed costs have little to do with income, and will not change with income within a certain range. Even if there is no income, enterprises have to bear the corresponding fixed costs.

According to the cost-volume-profit model, there are several ideas to increase profits: reducing fixed costs, reducing variable costs, and increasing sales. Reducing costs means reducing costs. Increasing sales will actually reduce the amount of fixed cost allocated to a unit product, that is, using a certain fixed resource will create more benefits, which means increasing efficiency. The combination of the two is to reduce costs and increase efficiency.

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Reduce costs: the reduction and transformation of fixed costs < P > Variable costs are strongly related to income, so there will be corresponding fixed costs when income is generated. In the absence of income, the variable costs of enterprises are zero and the only cost. Based on this feature, when considering cost reduction, it is necessary to reduce the amount of fixed costs, which can minimize the cost burden of enterprises, especially when the industry competition is fierce and income growth enters a bottleneck period or a downward period. The reduction of fixed costs will ensure the basic profit rate of enterprises to maintain normal operations.

There are two ways to reduce fixed costs. The first way is to reduce some fixed costs, and the second way is to convert fixed costs into variable costs by Wang Duan. I will cite several simple examples to illustrate the strong correlation between costs and income. From the perspective of human resources, we can distinguish between the front-end departments that directly produce income and the back-end departments that support it. For example, the business department belongs to the front-end department, and the functional departments such as human resources, finance, legal affairs and administration are the back-end departments that support it. If we divide the costs of the departments, the staff in the branches not only support the business, but also maintain the normal operation of the company. Therefore, the labor costs of these departments are fixed costs, and enterprises have to bear relatively fixed salary expenses regardless of whether there is business. When the business of an enterprise shrinks, it is necessary to adjust the branches accordingly, and consider whether there is a surplus of personnel, so as to reduce the total amount of fixed costs.

The labor cost generated by the front-end Ministry of Commerce includes a fixed basic salary and a commission calculated according to income. The fixed basic salary belongs to a fixed cost, and the commission belongs to a variable cost. If the business personnel do not bring any income to the enterprise, then the commission is zero. According to this logic, the way to convert the fixed cost into a variable cost is to adjust the salary structure. For example, adjusting the ratio of high base salary+low commission to low base salary+high commission can fully mobilize the enthusiasm of business people, and at the same time, this cost conversion can reduce the cost burden of enterprises. If there are severe seasonal fluctuations in the business of an enterprise, the best solution is not to increase the number of employees in the enterprise, but to consider outsourcing some links of the business. Outsourcing can flexibly adjust the number of personnel, reduce the labor cost in off-season while meeting the seasonal demand of enterprises, and actually establish a relationship between labor cost and income, transform the cost and reduce the cost burden of enterprises. From the perspective of marketing investment, by comparing and analyzing the teaching evidence of various marketing channels, we can compare the effect of marketing investment, cancel ineffective marketing channels to reduce the overall marketing expenditure, or turn ineffective marketing into discounts and concessions, thus converting fixed costs into variable costs. For example, some consumer brands choose platforms with more concentrated target customers for marketing promotion and issue coupons at the same time. The use of coupons will inevitably accompany the growth of income and bring benefits to enterprises.

In view of other fixed costs of enterprises, it is necessary to reduce or eliminate unnecessary parts by combing and controlling. For example, centralized management of low-value consumables such as office supplies can reduce waste and reduce the expenditure amount of office supplies: if you need to set up a molecular company in other places instead of purchasing some office equipment, you can rent * * * office space to reduce the cost of rent, water and electricity under the condition of small staff and great business uncertainty. These are all effective cost reductions. The reduction of fixed costs is not a simple one-size-fits-all, but needs to sort out and analyze the costs on the basis of business, find out the drivers of costs, comprehensively judge whether the costs are reasonable based on historical data and future business planning, cut off the unreasonable costs, squeeze out the moisture of the costs, and at the same time, link some costs with income through changes in management means and corresponding systems, and convert the fixed costs into variable costs, so as to achieve the purpose of reducing costs.

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Efficiency: Improve the efficiency of resource utilization

Efficiency is to increase efficiency and create more profits with the same resources. For the costs that remain after the above cost reduction process, we must find ways to increase efficiency, thus improving the overall income and profit of the enterprise. When the resources are relatively abundant in the rising period, enterprises will try and develop various new businesses according to the management's ideas, but new businesses need a certain incubation period, which will increase the burden of funds and costs for enterprises. It is necessary to make a regular resumption of new business, sort out the income, cost, profit, capital and resources of the business from a financial point of view, and make a financial forecast for the future business development based on historical data and industry conditions. Through these quantitative data to help decision-making, we can judge whether new business needs to continue and whether it needs to stop loss in time for loss-making business, so that the limited resources of the enterprise can be invested in developing business and the efficiency of resource utilization can be improved.

From the perspective of financial management, the management of accounts receivable and inventory can effectively improve the efficiency of capital flow. The overdue accounts receivable and the accounts receivable with bad debt risk should be dealt with in a timely manner in conjunction with the sales department and legal departments, and the collection or legal means should be adopted to speed up the recovery of accounts, so as to reduce the risk of enterprise losses. For out-of-season overstocked and unsalable products, various means should be taken to reduce the price or clearance, which can accelerate the return of funds and effectively reduce the risk of storage and product losses. These are all effective means to improve efficiency.

Talent is also one of the resources of an enterprise. By adjusting the organizational structure, clarifying the powers and responsibilities of each department and the division of responsibilities of each position, we can reduce repetitive positions and control the number of personnel in each department, and at the same time improve the efficiency of each department, support the development of the enterprise with the most refined team, improve the work efficiency of everyone, and make the limited labor cost of the enterprise bring more benefits. At the same time, we can also reduce the amount of unit fixed cost and improve cost efficiency by increasing sales volume. For example, we can use the existing product line and produce surplus materials, auxiliary products or semi-finished products, which will bring extra income. We can add more product categories in limited stores to increase the number of restaurants in stores and take-out food on the basis of the original meals. All these are to increase sales volume on the basis of constant fixed costs, gain more income by using limited resources, and enhance the income and profit of enterprises through the improvement of cost efficiency.

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Prerequisites for reducing costs and increasing efficiency

In order to achieve the goal of reducing costs and increasing efficiency, it is not only necessary to rely on the financial department, but also requires at least three preconditions. The first is the need for enterprises to have clear strategic planning. The enterprise has a clear development direction, and the management has a unanimous opinion on the business planning. On this basis, human resources can design the organizational structure and finance can be controlled. The second is the need for a strong push from above. Reducing costs and increasing efficiency will have an impact on all aspects of the business line and the work of various departments. Because of the large scope of the impact and the reduction of personnel and costs, the financial department needs strong support from the management to implement it smoothly.

thirdly, enterprises need to have effective financial management means. In the whole process of reducing costs and increasing efficiency, there are certain requirements for the professional level of finance. Ensure that financial analysis will not become a formality, but really play a guiding role. Financial personnel need to explore the causes of the problems based on the industry in which the enterprise is located, the pre-development stage and the internal problems that need to be solved urgently, and fundamentally solve the problems of inefficiency and heavy cost burden, so as to achieve the goal of reducing invalid costs and improving the overall efficiency of the enterprise. In fact, it is necessary to start from the actual production and life of employees, improve the individual ideology of every employee in the enterprise through education, establish the ideological concept of "one glory, one loss, one loss", and mobilize the intention of every employee. Make suggestions for reducing costs and increasing efficiency, plan the development direction of enterprises, create new benefits, reduce costs and improve efficiency.