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There a variety of effective cost saving strategies that organizations can (and should) employ to maintain control of expenses. While some and, rarely, all of these strategies are used for core expenses, they are often not used for non-core expenses. Non core expenses are those expenses that are not tied to revenue such as overhead costs. However, they are not always accounted for under Selling, General & Admin costs (S, G & A) and can be buried within Cost of Goods Sold (COGS).
In addition, divisions and departments occasionally manage their own non-core expenses, which are simply part of the divisional or departmental budgets. This leads to many of the issues that will be addressed here. That is, the effective cost management strategies employed for core expenses are often not employed for non-core expenses. Considering that non-core expenses are not ‘big ticket’ items, are scattered, buried in budgets and rolled up (generally) within S, G & A, it is easy to see why they are overlooked as an area for potential cost savings.
MGPS will periodically highlight specific cost savings tips that, if properly implemented and managed, will result in cost savings for any organization. Some of these tips will result in small, but measurable, cost savings, while others will result in far more significant cost savings. The results will depend upon the organization.
Non-Core Cost Saving Tip of the Week
Do you have any cost savings related questions? Send them to us at: costsavings@mgps.com
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