From the course: Corporate Finance: Profitability in a Financial Downturn
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Prioritizing spend areas
From the course: Corporate Finance: Profitability in a Financial Downturn
Prioritizing spend areas
- When it comes to spend analysis, the most important thing is to put first things first. You're looking for priority areas of opportunity. And there are a few categories where you're going to find the priorities, the biggest opportunities to cut costs. First, you need to identify the biggest categories of spend. Look at where the money's actually being spent. Biggest categories are often going to present big opportunities. Second, you need to be looking at big one-off expenses. These can monkey with the rest of your numbers in any of the analysis you do and you might need to pull these out. These could include the building of a new structure, a digital transformation, an accounting transformation, or it could involve automation of a facility. Anything big like that, you need to be able to identify and pull out. Additionally, you're going to have to look at trends in your expenses. You want to be looking at over time…
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