The “ACE “Strategy of Cost Management

The “ACE “Strategy of Cost Management

Every organization desires to reap in maximum profits from the business and run it with efficient and optimum utilization of resources.  Success or failure of a business is attributed not only to the revenue generated but also by management of that revenue. Cost Management is a concern and a prerogative of every CFO in an institution. Be it in good or bad times, effective management of costs leads to escalate the organization profits and at the same time sustain during difficult times.  All organizations strive to put the right processes and strategies in place to generate maximum benefit from available resources. Finding new avenues to boost sales and ways to slash costs are on the business objectives at all times.  So, what are the ways to reduce cost? Based on working and understanding different organizations, every company irrespective of their size needs to adopt the three key aspects to lessen their costs and increase efficiency. The” ACE strategy”, as we call it would be an approach of Automation, Consolidation and Elimination. Look for Processes or activities which can be automated. This reduces the time taken to perform, manpower cost and manual errors leading to re-work. Consolidation is an integral part of the strategy as it reduces duplication of work and aggregates activities/resources with similar tasks thus reducing the cost and time. Try and eliminate all the activities that prove to be adding least or no value to the company. The organization should always spend on value adding or revenue generating activities/resources. These three aspects of management encompass a large portion of efficient cost control.  Understanding the dynamics of the business and adopting simple ways to manage current commitments as well as prepare for future contingencies is what every organization should be well equipped with. Targeting the top line with constant vigilance on the bottom line should be the focus of every organization.


Pratibha Sharma

Senior Assistant Consultant – Finance and Strategy


Effective Revenue Management in Companies

In today’s world where companies are under immense pressure to highlight the revenues and profits, they are also under constant scrutiny to project actual revenues earned for the services provided. There seems to be a gap which is leading to a major concern among industries to identify the reasons for the companies not getting their due. Statistics say that approximately 5-7% of the revenue is lost due to revenue leakage. Identification of revenue leakages would be a prime focus to attain sound financial performance. Revenue leakage could occur due to misappropriation of funds by the staff, errors in documentation or recording transactions, lack of trained staff and operational issues in control systems. An event which could have an impact on the revenue could hinder the performance and growth of the company. Effective revenue management is necessary to ensure every process is followed, practises are consistent and the revenue is complete, timely and accurate. It becomes very essential for every company to understand where and how they are losing money. The processes need to be streamlined with appropriate controls in all the areas of the revenue cycle. Consolidating and co-relating all revenue related information and constant reconciliation could identify and minimize potential losses and associated risks. Automation of processes and industry best practices like Six Sigma, ISO and CMMI could also prove to be a method by which standardization of activities and processes could be brought about in the organization. Effective communication of risks and flaw in the operations to the management would enable them to make informed decisions. Management of revenue with effective and efficient approaches could pave the way in focusing on new avenues for revenue growth and build competent organizations for a better tomorrow.

Pratibha Sharma
Sr. Assistant Consultant (Finance & Strategy)