Every expense matters a lot in negating the company’s profit. The administrative expense is an essential expense. You cannot just completely eradicate it because these expenses are necessary for nature. The administrative expense is indirect in nature. You cannot ignore them. They are for the benefit of the company. Administrative cost is mostly fixed in nature. A few administrative expenses are variable in nature. In the balance sheet, it is represented as a general expense.
Manuals as costing and control of administrative homework answers will help an individual to identify the administrative cost more easily. Their accounting will be improved.
Few examples of administrative expenses
- Compensation paid to certain employees like those who are working in accounting and admin department.
- Rent of the building
- Insurance paid for building and other equipment.
- Depreciation cost of building, equipment, furniture and other assets.
- Legal fees are given to the lawyer
- Consultation fees are given to the consultant.
Why does strategic team want to cut administrative expense?
When the budget is decided, the strategic team focuses on administrative expense. They want to reduce the administrative expense as much as possible. One more reason behind reducing administrative expense is it will not hamper any other asset quality or cost. By minimizing administrative expense, one can easily manage to increase the profit and cash flow in the organization.
Costing and control of administrative homework answers will give you tips regarding administration expense cost cutting. Administrative expenses are essential in nature, but one can reduce it to its efficient number so that profit of the company can be maximized.
Ways to reduce administrative expense control
- Stop purchasing –
If you can find the good, you want to keep in your office in rented or leased agreement, prefer the same. Purchasing the heavy equipment or building will result in huge amount of expense at one business cycle.
To stop such a huge number of expense at one business cycle, opt for renting rather than purchasing. This will also save cash which you can later use to maximize your revenue.
- Traveling expense –
Employees have to travel to the client location for business purpose, or sometimes they work on client location. The company provides them traveling expenses. When admin is locating resources for traveling expenses of the company, one should look for a cheap but efficient way of traveling.
If required make employee travel in the group via bus, this will save a lot of money as well you can ensure the security of the female employees. With costing and control of administrative homework answers you can get a better clarity in regards to this subject.
- Entertainment expense –
Entertainment is essential for every employee. Admin fixes various outing and functions to entertain the employees. But one needs to strictly see for the best possible way to entertain the employee at minimal cost and in a best possible way. Entertainment cost should not be very high or very low.
- Work from home admin –
Technology has revolutionaries every aspect of the life. Now it is not necessary for you to even be in the place to work for a company. Work from home is an opportunity for a housewife to work. This is a win-win situation for the employee as he/she can work and devote time to the family also company doesn’t need to maintain a building and also the salary amount also decreases.
- Examine the building
Try to use the space available as much as possible. After utilizing the space of the office, some space is still left, you can lease it to some other company and get rent money.
- Subscription cost –
The administrative cost has various elements, most of them remain unnoticed by the staff. One such expense is subscription cost. Many time it happens that office does not need that subscription anymore but no one notices it, and subscription cost keeps on repeating every month. Same thing happens with membership expense. One needs to be very strict while examining extra administrative cost.
- Paper –
Paper is one such thing which is widely used in a company, but this paper expense can be reduced by utilizing mail facility and call facility. In the mail provide authorization. Saving employees database and company’s legal document can be done in CD or other file saving formats.
- Sharing expenses –
Now a day’s it is very common among the companies to share the marketing expenses among the companies. This will help the company to bear it on half price and also they can cover a large part of the population through other company’s channel.
The costing and control of administrative homework answers will provide an individual with more options to reduce the administrative cost. Controlling administrative expense can give a sharp benefit to the company.
These expenses are fixed in nature so if the employee can minimize it to its optimum level then next time the minimal amount of administrative expense will enter balance sheet and will increase the revenue of the company.
The costing and control of administrative homework answers will provide the employee with best ideas to reduce the administrative cost, and thus strategic team will get enough cash flow for their projects.
It will help in increase profit of the company as in balance sheet expense column will get reduced, and asset column will increase. It will also make the life of employees better because if the company is prospering, it will help the employee to prosper also.
What is important is checking out details of these manuals that make understanding of concepts much clearer and thereby can benefit students in a better manner.