 Business overheads will be expended as a direct or indirect cost and may be fixed or variable in origin. Business overheads they must be controlled otherwise there will be a detrimenat al impact on profits and cash flow.
Business overheads should be only:
- what is necessary
- affordable by the business
- and at a time when the business can absorbed such costs
To remain competitive, a business overhead cost reduction programme should be ongoing and consider:
- Identification of process waste
- Impact of new technologies
- Continuous Improvement programmes
- Volume changes
- Process changes
- Reduction in cycle times
- Product design review
- Improving communication channels
- Negotiating effectively with suppliers
Other Items of Interest:
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Business Overheads