Distinguishing between what is essential and what is wasted is often not obvious to anyone looking for savings. Companies often use a cost-killer, which is a specialist in charge of reducing the tax burden within a company. This provider offers several options to help their clients in the hunt for waste.
The cost-killer: description
The cost-killer is a service provider that helps to rationalize expenses by identifying costs potentially considered wasteful, the service is usually offered by consulting firms optimizing the costs in which work of accountants and tax specialists. Indeed, some companies do not have the resources to correct the problem of generous expenses and call upon professionals whose presence within the organization is not intrusive. The latter provide effective support by analyzing expenses, which offers the opportunity to make savings and, at the same time, increases the profitability of the activities.
In terms of remuneration, the client has two options: he can choose to pay the service provider a commission that will be proportional to the amount saved by the service provider, the percentage of which can be negotiated in relation to the complexity and duration of the assignment. Fixed-price remuneration, on the other hand, allows a payment on a daily fixed-price basis depending on the time used to complete the mission. This method of operation is preferred for missions influenced by the change of organisation within the company.
Organizing the work
The work of cost-killers is generally divided into three parts: the first part is to study the company’s accounts, followed by the company’s economics in order to propose preliminary cost-cutting solutions. Then the work turns to the study of the markets in order to identify opportunities and increase the economic dynamism of the organization and finally the service provider will encourage the client to launch a call for tenders and negotiate new contracts.
It is important to be aware that the analysis methods of these service providers may not meet the expectations of companies, using a cost-killer that guarantees savings, but their actions also interact with factors that they do not control, producing effects that are not immediate, for example the reduction in safety efficiency. It is also necessary to indicate the expected results in order to avoid misunderstandings by setting up a specification of the customer’s expectations. Choosing the cost-killer adapted to the company’s needs is the optimal solution to sustain its activities but can also be viewed negatively by employees, who see them as emissaries destroying jobs and well-being.