Every part of your business that has income and expenditure is a cost centre. For small businesses, this could be just one cost centre that takes care of the entire budget. For larger companies, there are probably many cost centres that make up the different departments.
However your business is set up, the same principle applies: once you have identified the cost centre(s), you should make sure that all of your outgoings, including stock, salaries, motor and travel costs and other overheads are collated.
From here, you can see how efficient each cost centre is. For instance, does one cost centre have too many staff? Is a particular cost centre making a big profit while another seems to be losing money?
By breaking these sections down, you will have a clearer idea of where your business is working well and where further efficiencies need to be made. You can easily identify where your money is being spent, on what, and by whom.
Contact Deirdre McDermott. Director OSK Audit for further information.
A video message from Tadgh O'Sullivan, Director.
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