The business and financial environment has been anything but healthy of late. In particular, the collapse of Northern Rock in the UK, and of the profits of numerous major financial institutions around the world, as well as the credit squeeze generally, have all made companies very nervous. The instinct all round is to cut costs. But reactive and poorly thought-through cost reductions can be counterproductive and damaging to medium and longer-term health. All accountants need to think hard before initiating or advising on ill-focused and poorly thought-through cost control measures brought on by these not unnatural fears. Instead, a more strategic approach to costs is required - ideally to get more value out of better-focused allocation of resources.
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