The Impact of new Cost Management Methods on Business Profitability

The paper outlines the role and the contemporary development trends of cost management concepts and methods. Specifically, cost management has been created as a source of information for managerial decision-making on matters of production. An increasing share of the costs arised out of production in the total costs of the company encouraged the process of developing instruments for managing costs that arise out of production, primarily in marketing and logistics activities. Therefore, cost management does not cover only the costs to the level of products and production departments, but also the cost per channel of distribution and individual customers. Thanks to the development of information technology and modern management methods, it is possible to spread the areas in which cost management contributing to profitability of the whole business process of companies in production, trade and services. Particularly important area of newer penetration of concepts of cost management are the costs of providing customer services that enable profitability analysis of distribution channels and individual customers. Literature research and the present business practice analysis presented in the paper prove that such information is useful. On the basis of it managers in the companies can modify strategies of the company relations to existing and new customers.