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Can cost management make some cash back positive?

Traditionally, how should cost management serve cash flow and profit return? manufacturing automation

High investment, the long cycle is a major attribute of the real estate industry. In the silver age, the market uncertainty faced by companies has increased dramatically. In 2015, destocking became the main theme of the entire industry, because only the disposal of inventory can return the life-saving blood of the company – cash flow and profits, a word, money! manufacturing automation

However, our cash flow and profits only sales? Sales are really important. But in fact, as a driving force for the operation of an enterprise, it runs through every link. Any one chain can serve cash flow and profits. So how should cost management in the traditional sense serve cash flow and profit return? manufacturing automation

A cash flow is more important than profit

The purpose of the company’s production and operation is to obtain profits. Cash flow is an economic resource that the company can use immediately to purchase property, repay debts, and pay dividends. Both are very important. However, under the current circumstances, in order to quickly withdraw funds and resort to various preferential policies (blurringly, it is indiscriminately lower prices), the housing prices are very large. Therefore, for now, the answer is self-evident—cash flows are more important than profits. many. Unprofitable companies can also survive (many electricity providers, such as Jingdong is a good proof), will slowly die without improvement for a long time; without cash flow, minutes will be lost to death. manufacturing automation

This is true even from another point of view. Profit is the final financial result of an enterprise’s production and operation in a certain period of time, that is, the balance after the company’s income and costs are offset. However, profits sometimes reflect the strength of a company’s profitability. If housing companies blindly push sales to increase sales volume, and in order to expand sales, companies extend the payment period of customers and increase inventory, it will only lead to a sharp increase in corporate risk. manufacturing automation

Of course, too much cash flow is not a good thing, because it means that companies have a lot of money in the sun, need to improve the efficiency of use – of course, this kind of thing is rare in today’s housing prices, otherwise we will not have to Discuss the question of how to quickly regain cash flow and profits.

A company’s cash flow and profits do not always change in the same direction. Large profits do not represent sufficient cash flow. Sufficient cash flow does not represent large profits. So how can we maximize cash flow and profits as much as possible? I’m sorry, it’s back. What should cost staff does? manufacturing automation

Second, how should the cost staff do?

How to do something for the company’s cash flow and profits in the context of cost management.

Everyone thinks that what cost personnel needs to do is: establish large-cost awareness, standardize operations, reduce link costs, deduct unreasonable costs, allow costs to be profitable, and allow costs to create value. manufacturing automation

This is still too macro, the following analysis based on everyone’s discussion.

According to everyone’s discussion, three approaches are based on the perspective of cost management to ensure the safety of cash flows: 1. Through indirect financing, overall expenditure can be reduced; 2. Through payment, etc., cash can be guaranteed to some extent. Safety (inflow minus outflow is positive); 3. Reduce expenditures as much as possible in business activities. manufacturing automation

1, reduce the overall expenditure

Now, several large real estate companies are increasing their inventory. To put it bluntly is to increase the cash flow. Because sales and collections are fresh blood, other financing and bridges are blood containing vampires. However, it is now in the period of adjustment. Many housing enterprises have been unable to stop because of excessive expansion in the past few years and can only continue to move forward.

Of course, as a reasonable bar of capital operation, various debt problems are involved. Is there any better measure? manufacturing automation

Everyone thinks that starting from the tendering, the main body, decoration, earthwork, and construction unit can provide financing, and the construction fund can be paid by commercial contractors. This can make use of the construction unit’s funds as early as possible to develop, and can be converted after the development loan is down. At that time, Open sales funds can be returned.

At present, small-cap trading, the partnership is also a supplement to the positive return on cash flow. Typically, Vanke’s plan to pull construction units into partners is a form of financing. manufacturing automation

It should be noted that if you want to work hard on tendering and contract terms, you need to do a good job of planning in advance. You should consider various factors in your contract planning, such as the advancement of funds, deductibles, etc., fund payments, and control of contract payments. Conditions, funding plans, the accuracy of payment plans, etc. Try to avoid risks. manufacturing automation

2. Reduce or delay spending

Some fees can be paid less, this is an absolute amount; some can be delayed, which is the relative amount of money time cost weighted. Both can be used flexibly during the actual operation.

The land value-added tax is a large space that can be manipulated. The disadvantage is that it can actually save a lot. Of course, being able to save the province is always good. In actual operation, the VAT prepayment part should be paid less, because although the taxation department says that there are an overpayment and less compensation, under normal circumstances, more pay will not be refunded. manufacturing automation

Social security can also make a fuss, you can pay less, but that is what the human resources department should do, and always work in the staff’s mind, not a long-term plan. When the market changes drastically, enterprises need talent more, in order to save money. Employees’ pockets may not be worth the candle. They are not recommended unless they are absolutely necessary. Slowing down is relatively mild. manufacturing automation

Quota design and tax planning are the most important highlights. To a certain extent, the planning and responsibility of taxation will lead to a jump in taxes and fees. When the budget is not given, when the settlement is given, such an action can be delayed for a minimum of 1.5 years. For companies with tight capital, 1.5 years may be the time to save lives.

All in all, the migrant workers’ guarantees such as guarantee deposits and large packages are delayed, and part of the value-added tax is prepaid. The social security can be delayed and paid less, that is, the taxes must be paid less and the fees must be delayed. Of course, local regulations are not the same, and the bottom line of all strategies should be consistent with local laws and regulations. And an important prerequisite is not to sacrifice quality and mess up the partnership. Do a good job of fund use plan in the early stage, capital expenditures are delayed as much as possible. manufacturing automation

3, reduce operating expenses

How to reduce expenditure as much as possible to ensure cash flow in business activities? The quality of the design is the main factor, and it is the key to do a good job of drawing optimization.

Drawings are the root. If the drawings are inaccurate, inapplicable, or unscientific, it will cause repetition and affect the cost. Therefore, drawing optimization is critical. Paying attention to the quality of design is also the same reason. The drawing quality is not high, the design is unreasonable, and finally, the cost is affected, which affects the handling of the documents. manufacturing automation

In particular, it should be pointed out that the optimization of costs does not mean blindly doing a subtraction. It also needs to stand in the perspective of marketing and think about how to fit the needs of customers, reduce hidden costs, and appropriately raise the explicit costs. Design optimization should pay attention to process control, but cannot pursue result control. In order to ensure the quality of design and drawings, sales control techniques can be used to control the display effect, cost, and design. In the design optimization process, sales, design, engineering, and cost are jointly completed, which can effectively prevent the production of inferior works. manufacturing automation

In practice, the cost needs to participate in the preliminary investment calculations, control from the source, and put forward some rationalized optimization. The optimization of drawings can also consider the introduction of external professional organizations, structural optimization companies, and professional consultants.

Of course, drawing perfection does not mean that the result is perfect, because the drawing is still a map after all, and it will inevitably change when it is landed. Moreover, the government’s policies are constantly being updated, and conditions such as fire protection and residential construction are constantly being updated. It is sometimes difficult to ensure that when the drawings are landed, the policy remains unchanged. Therefore, contract planning is also needed. manufacturing automation

For cash flow control, contract planning, reasonable arrangements, project schedules, control project payments, large amount of postponement of payment, the advance balance of the company’s cash receipts and expenditures, and avoidance of spending on large amounts of cash concentrated for a period of time should be done in advance. Short-term negative numbers promote recovery of cash flow.

The strategy of fast, bright, bright and short-lived policy is also helpless—the development cycle is short and the preparations are adequate. Basically, the time when the land is taken is the date of commencement of work, which effectively reduces the capital and capital cost, and improves the return on investment; investment in the project. Shorter, high return on capital, fast sales, fast returns. Of course, the short-term fast needs to allow a large amount of cash to be used in a centralized manner. This is a relatively ideal state. Projects, funds, plans, teams, costs, the timing of market entry and other factors will all have various impacts. Most companies are unable to do so. manufacturing automation

to sum up

Through the analysis above, it can be concluded that, based on the perspective of cost management, the way to effectively help the company to regain its cash flow and profit mainly starts from two aspects. First, measures that can directly reduce costs, such as starting from the source, optimizing design, etc. The second is to reduce the cost of capital savings. In the process of actual operation, each company can choose its own method and method according to its own situation. manufacturing automation

1. Measures that can directly reduce costs: 1) reduce social insurance premiums for engineering costs; 2) start from the source and optimize design; 3) reduce subcontracting costs and avoid subcontracting and matching fees; 4) tax planning reduction and exemption of taxes and fees.

2. Saving funds to reduce payments Cost measures; 1) Adjustment of project payment proportion; 2) Reduction of payment scope and reduction of payment base; 3) Delay in payment of social security provident fund; 4) Performance bond and refund time, and house arrival payment. manufacturing automation

The cost personnel establishes a full-cost control concept by setting up a company-wide concept of full-cost control. Within their functional scope, they can serve cash flow and profit returns in multiple channels. However, an indisputable fact is that according to the current situation, sales cannot keep up, and it is very difficult for the funds to come back. It is naturally difficult to talk about cash flow and profits. The impact of marketing is the most direct. Some housing companies try to make the marketing director design, in order to ensure faster capital inflows, in fact, real estate sales are also good. manufacturing automation

Of course, there are people who worry that sales management will not be costly, whether it is reliable, whether it is compromised, whether it is a compromise, whether it is necessary to raise opinions and strengthen coordination. Market demand is changing faster than ever before. Jumping out of cost to see costs and putting cost thinking in front of them is also a proposition to consider. To do a villa, it must be to do the right, not save, just do it, it must be standardized, scale, and save. Talking about cost management without market and customer needs will not help cash flow and profit recovery, it is easy to run rampant. manufacturing automation

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