Cost Management System Design For Real Estate Firm

With the high-speed boom of the real estate in our country, the real estatefirms are stepping toward the management of trans-regional scale. However, asthe increasing cost in obtaining the land, and the realistic situation ofregularizing norms of the market, the issues, such as small-scale and extensivemanaging in the developing enterprises, begin to expose obviously. The mainperformance exists in lacking of planning or budgeting control in themanagement activities, weakening on capital management, shorting of overallcoordinating and controlling of the whole development process of the objectand so on. Especially, the problem is that the poor level of cost managementhighlights under the declining level of profit conditions.There is a question that weakness of cost consciousness, shorting ofeffective measures to control and reduce cost, lacking of the depth of costmanagement, not forming the effectively whole process including costmanagement system of organization and system guarantee exist in the costmanagement for real estate development enterprises. The paper aims thisquestion, applying the theory of cost management, combining with my ownworking practices of developing enterprise. Firstly I make an overallintroduction to the contents of cost, available management method,management organization and system guarantee for real estate developmententerprise. On the basis of this phenomenon, applying the value-chain analysis,target costing from the angel of the whole value activity pursued bydevelopment enterprise, and illustrated systematically the system, includes thecost management system of organization and system guarantee.The paper introduced the major business, organization and main runningand management activity, and induced systematically the main running andmanagement activity reflected by the form of value-chain for real estateenterprise, analyzing completely the structure and available theories, puttingforward the four level of the system of cost management for real estatedevelopment enterprise: the contents of cost of development enterprise, themethod of cost management activity of cost management, the direct body andsystem guarantee of cost management activity. The detailed cost managementactivity pursued by real estate firms, pointing out the four level coordinatingand operating organically, forming the system of cost management of realestate development enterprise, and focusing on the system in the followingrespects:Firstly, structure of development costSecondly, the major theories and methods of developing cost management1.Value-chain analysisThe method of value-chain analysis is a kind of analytical way to strategiclevel which puts forward a completely beneficial perspective, making us seeclearly all strategy activities including from project planning, designing,implementing, selling to service after sale, meanwhile, finding out cost driverhaving important influences on cost from each stage.2. life -cycle costingThe product life cycle cost is made of three components, upper-streamcost, production cost, downstream cost, which propose a brand-new view forreal estate firms, Being capable of finding decision-making is key to the realestate object, as well as the significant influence on exploring objectimplementation, marketing and management service in the coming period,Decision-making in the designed stage locks the large part of the rest of lifecycle cost.3. Target costingAdopting the method of product assessing to lay out cost planning in theterm of different stages, define target cost, using target cost as an aim to controlcost in order to achieve cost controlling.4. The method of "Exception"management ----providing a availableand detailed operating method during the cost controlling.Thirdly. the organization guarantee of the cost management activityBuild up the cost management committee from the organization angle,establish the full-time cost manager, determine the cost managementresponsibility of each section, implement the effective management for thewhole process of development cost.Fourthly, the system guarantee of the cost management activityPointing out the development enterprise aims to strengthen costmanagement, build up and perfect various cost management systems.Based on the four aspects in brief as described above, in view of theall-round perspective provided by value-chain analysis, applying target costingto illustrate and design systematically the system of cost management for thewhole process of the real estate firms.1. Establish the project cost and process cost programs, set target cost interm of cost program, dorminate cost management working of the wholedevelopment firms by planning cost and target cost .In this part, Introduce the forming process|, estimation method and targetcost, determined method of responsibility cost of dymamic cost plan of theproject, at the same time making statememt of principle and demandestablished the process cost program.2. Determine cost object according to the cost program. set the index ofchecking up, carry out the work of cost checking.3. Achieve the goal of cost control as a starting point, make plan cost ortarget cost as the basis, hold tightly the drive of major cost, which implementcost control of the whole process for the total value-chain of the real estatedevelopment enterprise .This part illustrated the work of cost control from the angel of value-chainmanagement of the whole process , which is a key part in this paper. It dividedinto seven parts in detail: project planning, cost control in the decision-makingof investment stage, cost control in the designing stage, the moving stage, thebidding and making the contact stage, the operating stage, the accounting stageand process cost. Making sure the emphases of cost control and the responsiblesection (person), and proving to be true by practices of the developmententerprise.4. Analyze cost based on the result of checking cost, put forward theimprovement measures of the cost management, revise the system of costcontrol as described above.Some aspects of reasons about cost change were illustrated in detail inthis part, on the basis of it, proposing the analytical principle and adoptingmeasures.Above it is from the point of the whole process of the value-chain and...