1. Significance of cost control

1. Cost control is an important means of cost management

Cost management includes cost prediction, decision-making, planning, control, accounting and analysis, among which cost prediction, decision-making and planning provide a basis for cost control. And cost control should not only ensure the realization of cost objectives, but also penetrate into cost prediction, decision-making and planning. Cost control in modern cost management focuses on the whole process of cost formation.

2. Cost control is the driving force to improve enterprise management

The production and management activities and management level of an enterprise have a direct impact on the product cost level. To implement cost control, it is required to establish corresponding control standards and control systems, such as material consumption quota and delivery system, working hour quota and expense quota, etc., which should be formulated and revised in time, and strengthen various management work to ensure effective cost control.

3. Cost control is an important condition for establishing and improving the in-plant economic responsibility system

And the in-plant economic responsibility system is an important guarantee for implementing cost control. To implement cost control, first of all, cost indicators need to be decomposed and implemented in all departments and links of the enterprise. All departments and links are required to bear economic responsibility for economic indicators, so as to encourage employees to actively consider saving consumption and reducing costs, to ensure the completion of cost indicators, and to make cost control go smoothly and achieve practical results.

The current situation of enterprise cost management in China

Because of the rising prices of means of production, the production cost of enterprise assets has increased significantly, and the logistics management of many enterprises is out of control, and the waste of energy is more serious, which increases the cost loss of products. In addition, the production equipment and technology of the enterprise are outdated and backward, the quality of raw materials is not good, the transportation management is not good, and a large number of defective products and waste products are produced in the production process, resulting in great quality loss. In addition, the cost accounting is not true, on the one hand, because the accountants do not pay attention to it ideologically, on the other hand, in order to achieve some purposes, the enterprise appears to be surplus, but in fact it is a loss. Because the contract responsibility system is not perfect, enterprises pay attention to profit, not cost, and short-term behavior is rampant; Enterprise leaders have limited tenure, lax management and poor personnel quality; Poor financial and auditing supervision. Enterprise managers have weak awareness of cost management. Therefore, the cost management is slack, the budget constraint is weakened, and the loss and waste are amazing.

The main problems existing in traditional cost management

The scope of cost management is too narrow

Due to the influence of long-term planned economy, Chinese enterprises often only pay attention to the management of production cost in cost management, but pay little attention to the links of supply and sales, which is far from meeting the requirements of market economy. From the perspective of cost drivers, the cost of any product of an enterprise from the beginning of production to the profit can not only be understood as the manufacturing cost, but the whole cost throughout the product life cycle. Therefore, cost management should also be extended from material product costs to non-material product costs, such as human resource costs, property rights costs, environmental costs and so on.

The concept of cost management is backward

In the view of traditional cost management, economy has become the basic means to reduce costs. From the perspective of modern cost management, it is not difficult to find that cost reduction has conditions and limits. In some cases, controlling the cost may lead to the decline of product quality and enterprise efficiency. Therefore, this kind of cost management is a kind of negative rather than positive cost management. Therefore, enterprises should not only pay attention to the production cost of products, but also pay attention to the benefits of their products in the market. Today, with the rapid development of science and technology, it is impossible for enterprises to gain advantages simply by reducing costs. Enterprises should rely more on the input of technology, thus generating greater benefits, that is, relatively reducing costs, thus improving cost-effectiveness.

the foothold of modern cost management

based on long-term strategic objectives

the purpose of modern cost management is to obtain long-term and lasting competitive advantages, so that enterprises can survive and develop for a long time and be based on long-term strategic objectives. Traditional cost management is based on short-term cost management. For example, if an enterprise conducts labor cost management, according to the principle of "cost reduction", it is advisable for the enterprise to hire employees with relatively older age and high technical proficiency in order to reduce labor costs. However, according to the standard of "cost advantage", enterprises should hire young and highly educated employees from the long-term interests in order to gain a long-term cost advantage.

Based on the overall development strategy

Modern cost drivers should be strategic. In order to make enterprise products have strong competitiveness in the market, cost management can no longer be limited to the production (manufacturing) process of products, but should be extended to the realization of goals. With the development and change of social economy and the continuous innovation of high technology and management science, the scope of cost management is expanding day by day. For enterprises in the development and competitive market environment, the enterprise cost management should be considered comprehensively in the whole market environment. Therefore, the scope of modern enterprise cost management includes not only the control of production costs, but also the control of circulation costs, as well as the control of research, development and design costs.

the implementation of modern enterprise cost management is conducive to improving and strengthening enterprise management. As a perfect enterprise management system, modern cost management is an indispensable part. How to correctly introduce and apply modern cost management is a problem worthy of deep thinking in China's enterprise management. Modern cost management is a combination of economy and technology. In modern enterprise management, cost management occupies a very important position. It breaks through the narrow research field of traditional cost management, and shifts its focus to the broader research field of enterprise overall strategy, focusing on procurement, technology, financial field and cost analysis of competitors, which is beneficial for enterprises to correctly predict and make decisions, thus correctly selecting their business strategies, correctly handling the relationship between enterprise development and strengthening cost management, and improving the overall economic benefits of enterprises.

Modern cost consciousness means that enterprise managers pay enough attention to cost management and control, and are not bound by the traditional mindset that "cost control means cost reduction, and the cost cannot be reduced to a certain extent", and fully realize that the potential of enterprise cost reduction is endless. The content of modern enterprise cost management is not only to reduce costs in isolation, but also to seek cost minimization from the comparison of costs and benefits. On the one hand, the work of cost reduction is extended to various departments such as supply, production and design, forming a cost reduction pattern of all employees in the whole factory and forming a cost consciousness throughout all departments of the enterprise; On the other hand, the cost reduction will be positioned from the height of strategic layout, that is, cost thinking will be injected from the selection of development project types and feasibility study, and cost consciousness with long-term development concept will be established. The concept of cost-effectiveness can be popularly expressed as the idea of "spending money to save money", that is, some expenses that seem expensive in the short term should be spent for more benefits in the future. For example, the introduction of new equipment may lead to a large expenditure, but in the future, the increased output due to the improvement of equipment utilization efficiency and the comprehensive benefit of the reduction of equipment maintenance costs may make up for the expenditure.