This article describes basic activities needed for the management of general economic expenses. General economic expenses are necessary in order to provide effective management activities of the company. Organizations need them in order to exist. So, reasonable management of general economic expenses and optimization of them can play a significant role for your business.
What’s the difference between general production expenses and general economic expenses?
General production expenses and general economic expenses are indirect expenses which have a strong connection with production process. At the same time, it is impossible to classify them as certain categories of products.
General production expenses are general expenses of production units which are needed to provide maintenance and serving of the enterprise and to manage production process.
General economic expenses are expenses of the enterprise needed for production process management.
Many companies nowadays choose the process approach in order to enlarge company effectiveness. Such activities as business process optimization become a common practice in business. Very often improvements are connected with reducing of expenses of general production expenses and general economic expenses.
How to reduce general economic expenses
After the standardizing of general economic expenses you will be able to provide optimization of business processes and expenses. For example, in order to reduce certain expenses, there is a number of activities aimed at it:
- Leasing of premises. It is necessary to assess how effectively premises are used and whether the costs for leasing correspond market tariffs. Optimization of business processes in order to reduce general economic expenses is possible after:
- Reconsidering of conditions of the lease contract
- Changing of the office to another one with more profitable conditions
- Subleasing of parts of premises
- Purchasing of the office
- Communal services. Very often expenses on communal services can be avoided by means of business process optimization in the sphere of consumption of power at the enterprise.
- Expenses on telephone communications can be reduced by means of optimization of business processes of marketing and ordering.
- Expenses on economic needs, buying of materials for office automation equipment. These expenses can be reduced by means of cooperation with suppliers who offer more profitable conditions. To do that, you should provide the analysis of prices of various suppliers and to make a contract with those who will help to reduce expenses.
- Other expenses. Expenses on creating of the corporate spirit should stand out from the others. Expenses on corporate events, celebrations can be included in this group of expenses.
General economic expenses are the group of expenses of the company which play a significant role in maintenance of the company. That’s why you should pay a lot of attention to the cost management.