Comprehensive Cost Management and Reporting Solutions

Client Objectives:

In the competitive landscape of Fast-Moving Consumer Goods (FMCG), efficient cost management is essential for sustaining profitability. This project commissioned by an FMCG business aimed at identifying cost drivers, developing an allocation matrix, and implementing robust reporting mechanisms to enhance cost transparency and efficiency across departments.

• Conduct a comprehensive analysis to identify the key cost drivers within each department of the organisation. Understanding these drivers is essential for accurate cost allocation and effective decision-making.
• Develop an Allocation Matrix: With insights gathered from the analysis of cost drivers, the next step was to develop an allocation matrix. This matrix would serve as a framework for distributing costs across different departments in a transparent manner, aligning with organisational goals and objectives.
• Develop and implement the reporting: The project aimed to establish reporting mechanisms to track and monitor costs effectively.

Our Approach:

We started out on this project by developing our understanding of the operating model, the financials and the processes.

We performed a thorough review of the client’s existing cost accounting, mapping processes, and data sources. This involved gathering data on various cost elements, including direct and indirect costs, fixed and variable costs, and overhead expenses across different departments.

We conducted in-depth analyses to identify cost drivers and their impact on departmental expenses.

Based on the findings, we developed a comprehensive allocation matrix tailored to the client’s organisational structure and cost allocation requirements. The matrix incorporated factors such as transactions volumes, resource utilisation, and departmental activities to ensure accurate and equitable distribution of costs.

Furthermore, we designed and implemented reporting dashboards and tools to provide stakeholders with visibility into cost performance.

Client Benefits:

Enhanced cost transparency: By identifying cost drivers and implementing an allocation matrix, the client gained a deeper understanding of cost structures across departments, leading to greater transparency and accountability.

• Streamlined Processes: The implementation of reporting mechanisms streamlined cost management processes, reducing manual effort and enhancing operational efficiency.
• Cost Savings: Through better cost allocation and management practices, the client was able to identify opportunities for cost savings contributing to increased profitability.