Three step to the decline of expenses:

Classify your expenses on the expressly marked categories. For example are expenses on raw material and materials, payment of labour, all lines production expenses except for expenses on payment of labour, charges except for expenses on payment of labour.

The example of classification of expenses is resulted in:

Concentrated on the most considerable expenses, will define what expenses must be adjusted.

Plan and will carry out the decline of expenses.

The general going near the decline of expenses is resulted in.

The current Russian labour legislation allows companies to abbreviate both the amount of employees and their salary. Resulted in recommendation on the decline of labour expenses.

Reduction of expenses on raw material and materials

For reduction of expenses on the purchase of raw material and materials Company can do following:

• To revise in the benefit the terms of contracts with existent suppliers.

• To find new suppliers;

Example: a company can substitute the imported materials by the analogical products of domestic production; to set direct relations with the producers of materials, or to shorten the number of mediators; to conclude treaties with suppliers offerings the most advantageous terms.

• To use less dear компоненты, where it is possible. A company can even bring in structural changes in the produced products in an order to be in a position to pass to new materials.

Example: the producer of pastry wares passed to the new packing, as before it was made from the imported materials which became too dear after devaluation of rouble.

• To help suppliers to reduce the expenses.

Example: the large Russian producer of pastas successfully co-operates with local farmers, helping them reduce expenses and the same providing on your own low purchase prices on a wheat.

• To carry out the purchases of materials jointly with other buyer for one supplier.

Example: two trading company can produce a joint purchase in an order to get a discount for a volume.

• To produce necessary materials independently.

Example: enterprise on a production jalousies began to make the number of components is independent anymore, when devaluation of rouble did the purchase of these components abroad economic groundless.

• To inculcate technological processes which allow to save on the cost of raw material. Soviet slogan "Economy must be an economy" saves the force and in present terms.

Example: a company on the production of cold tankards was able to reduce the production inputs container on 30 percents, retuning a machine for the production of plastic bottles so that it could use more easy (and as a result less dear) purveyances for making of bottles of former size.

The examples of organization of more effective management production processes are resulted.

• To give a primary value the process of purchases of raw material and materials.

Example: soon after the events of Augusts, 17, 1998 a company is a producer of food stuffs translated the best managers from the department of sales in the department of purchases of raw material and materials. As a result a company was able to save expenses on materials almost at former level, finding new suppliers.

• To revise the policy of account of raw material and materials with the purpose of minimization of tax payments. The methods of account are driven.