Simple Explanation of Cost Management?
Cost Management is a broad, strategic process of planning, estimating, budgeting, financing, funding, and managing project or operational costs. The aim is to reduce or keep under control costs or expenses. It basically consist of several overlapping activities, including Resource management, Cost estimation, Budgeting or cost tracking. Cost management process consist of four main steps, phases:
- Budgeting: Define the planned costs and allocate funds for projects, departments, or activities.
- Cost Tracking: Record actual expenses and spending as they occur. (hours worked, buys, bills, etc.).
- Budget Tracking: Monitor how actual spending compares to the planned budget (actuals vs. budget).
- Cost Control and Correction: Analyze deviations and take corrective actions to stay within budget.
Aptien Explain for Business Humans
- Cost management means tracking your company's expenses to eliminate unnecessary spending and ensure profitability.
How Aptien Helps You Manage Costs
Aptien focuses on the daily aspects of cost management and offers an integrated tool for budgeting and expense tracking. You can manage costs for any asset, project, or employee. It provides the foundation for all cost management efforts. Real-time data is crucial for informed decision-making. By tracking costs and expenses, you can compare actual spending with planned budgets and take corrective action if needed.