What is Cost Control ?

Cost control is the practice of identifying and reducing business expenses to increase profits, and it starts with the budgeting process. A business owner compares actual results with the budgeted expectations, and if actual costs are higher than planned, management takes action. As an example, a company can obtain bids from other vendors that provide the same product or service, which can lower costs.

Cost control is an important factor for maintaining and growing profitability. Outsourcing is used frequently to control costs because many businesses find it cheaper to pay a third party to perform a task than to take on the work within the company. Corporate payroll, for example, is often outsourced because payroll tax laws change constantly, and employee turnover requires frequent changes to payroll records. A payroll company can calculate the net pay and tax withholdings for each worker, which saves the employer time and expense.

compare bet the acual cost and budget to get the variance that help to get the performance to provide the evaluation to the top management to take a  correct decision for the variances.