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Cost Savings


The different types of benefits that are realized from specific measures/ actions taken by an entity as to control and reduce its overall spending on operations, processes, economic resources, and decrease the effects of corresponding costs and expenses on its bottom line.

Measures and actions that give rise to cost savings vary depending on an entity’s size, operations, etc. This ranges from improved efficiency to the ability to obtain economic resources (such as assets and supplies) at lower costs, and so on.

Costs savings take many forms including bottom-line cost savings, re-deployable cost savings, realized cost savings and cost avoidance savings. For example, re-deployable cost savings result from operational efficiencies that an entity achieves or expects to achieve over and above a return on investment (ROI). These savings are redeployed- that is, reinvested into other areas in the entity that are currently under-developed or under resourced. Redeployable savings are benefits that usually exceed bottom-line cost savings.



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