Cost of Goods Sold (2 of 2): Cutting Overhead - John M. Leask II CPA/ABV, CVA

Cost of Goods Sold

Part 2 of a 2 part series

Warning Signs:

    • Decreased gross margin.
    • Increased cost of goods sold.
    • Significant adverse deviations from budget.
    • Significant increase in a particular line item’s cost

Steps to Improve: CUTTING OVERHEAD

  • Conduct an energy audit; self audit or use outside professionals.
  • Control facilities’ energy cost.
  • Reduce utilities cost with maintenance and rate analysis.
  • Lighting: the way to cost reduction.
  • Reduce HVAC energy cost.
  • Decrease machinery and equipment energy cost.
  • Heat water for less.
  • Outsource cost: consider the cost of in-house production instead.
  • Reduce trash and production waste.
  • Shipping: Selecting the right carrier.
  • Shipping: Deal effectively with your carrier.
  • Shipping: Improving your shipping procedures.
  • Shipping: Reduce outbound freight cost.
  • Shipping: Decrease inbound freight cost.
  • Checklist – Shipping cost: use shipping and freight cost study to improve – 50 ways.

Back to The Business Doctor

>>Cost of Goods Sold (1 of 2): Buy Right & Save
>>Cost of Goods Sold (2 of 2): Cutting Overhead