In order to "minimize expenses," we must understand how expenses are used in the workplace.

1. Recognize Expenses as They Are Incurred

For purchased-goods expenses, in principle, the expense is recorded during the month the purchase occurred. Rather than recording the amount of raw materials used in a month, we record the amount of raw materials purchased that month.

2. Beneficiary Principle

In Amoeba Management, expense allocation reflects the "beneficiary principle." In other words, a department that gains or profits from a transaction that generates an expense must pay a share of that expense.

3. Expenses Do Not Include Labor Costs

Hourly efficiency regards people as creators of added value, not a cost. Therefore, labor is not treated as an expense when added value is calculated in the hourly efficiency report.

4. Subdivide Expenses

To minimize expenses, we must view the normal account titles on a profit and loss statement in more detail. By subdividing the expenses, we can come up with creative and original ideas to minimize costs.