Advantages/Benefits: The Cut or Cost Cutting method is an indispensable method for controlling costs and assessing directly/in depth whether it is possible to apply a reduction of the same for the purchase of goods/services useful for the operation of the company itself.
The advantage is to summarize the costs in one or more economic values in order to highlight any possible reductions or eliminations of certain costs, defined as non-core.
In particular, with the or Cost Cutting method, the structural costs of a company are analyzed such as energy, gas, water, insurance, leasing, telephony, stationery, Food & Beverage and a whole series of specific costs in based on the type of company.
Costs vary over time and space. Over time as what occurs today will never be the same as what will occur tomorrow. In space as different geographic zones they will have different cost dynamics. To this end, it is important to constantly evaluate the costs of the internal company structure, because they can lead to effective and substantial savings.
When to apply Cost Cutting
The advantages that can be found using the CUT method are those of having a continuous monitoring of the company management trend, through an initial assessment, using specific professional tools to analyze the data, to reclassify the financial statements and to highlight the savings expected within the company budget active management control.