46 Examples of Cost Control

John Spacey, updated on June 23, 2023

Cost control is the process of applying due diligence and oversight to spending and acting to reduce costs. This doesn't always involve cost reduction but is a process of confirming that spending conforms to plans, policies and regulations. Cost control also monitors the performance of strategies, programs, projects and operations to ensure that spending achieves business objectives. The following are illustrative examples of cost control.

Cost control policies and procedures	Expense approvals
Reviewing and reducing expenses	Renegotiating contracts and prices
Rent and lease negotiation	Salary negotiations by a specialist in HR
Benchmarking costs to make sure they are competitive	Procurement processes and due diligence
Cost analysis to find optimizations	Streamlining processes
Discontinuing unprofitable products, services and activities	Business travel policies
Online meetings to reduce travel costs	Bulk purchasing
Tax planning	Total cost of ownership analysis such as buying vs leasing decisions
Building a cost-conscious culture	Leading by example such as executives who take economy flights
Internal controls such as segregation of duties	Freight cost reduction
Technology rationalization	Retiring legacy technologies
Shifting to low cost or no cost technologies such as open source	Tracking assets and inventory
Identifying and retiring unused assets	Recovering value from retired assets
Inventory management practices to improve inventory turnover	Outsourcing non-core work where partners are less expensive
Preventive maintenance	Validating project estimates with reference class forecasting
Reviewing employee compensation costs to identify excessive compensation	Reviewing employee expenses
Supplier consolidation	Managing the performance of suppliers to ensure they deliver
Internal cost audits	Third-party cost audits
Employee performance goals for cost optimization	Zero-based budgeting whereby budget must be reevaluated each year
Business cases for proposed investments and strategies	Project oversight
Mandatory governance reviews for projects that go over budget	Contract management for cost reduction
Automation of manual processes	Reducing rework and cost of quality
Cost reporting for departments, teams, projects and initiatives	Financial oversight and governance

Cost control also has a compliance role by implementing financial controls and oversights that may be required.

Overview: Cost Control
Type	Financial Controls
Definition	The process of applying due diligence and oversight to spending and acting to reduce costs.
Related Concepts	Financial Controls » Segregation Of Duties » Reference Class Forecasting » Cost Of Quality » Cost Reduction »