Question

-what is difference between cost management and strategic cost management?

Answer 1

Cost management is the process of planning and controlling the budget of a business. Having a good cost management system in place will allow organizations to better estimate and allocate budget. Cost management is a form of management accounting that allows a business to predict impending expenditures to help reduce the chance of going over budget.

Strategic Cost Management (SCM) is the cost management technique that aims at reducing costs while strengthening the position of the business. It is a process of combining the decision-making structure with the cost information, in order to reinforce the business strategy as a whole. It measures and manages costs to align the same with the company’s business strategy.