A Research On Cost Management Mechanism Of Real Estate Enterprise In The Perspective Of Activity-Based Management

With the government’s macro-control of the real estate market, the profit margin of real estate enterprise declines generally. Under the environment of new competition and challenges, the development strategy where scale is everything will give way to cost management. As a capital-intensive industry, the real estate industry is still belongs to emerging industry in China, and the level of cost management has larger ascension potential, so the real estate enterprise cannot be "stuck in the past". Therefore, to build a kind of self-optimization cost management mechanism has important strategic significance. Based on the main problems which exist in current cost management, such as responsibility problems, and that combined with feature of the real estate enterprise, such as lager investment scale, longer development cycle, more complicated development process, interagency more collaboration between the departments, and so on, this paper puts forward the importance of the active participation of management employees. By using the main idea of activity-based management, the responsibility center is built on the base of center of activities to avoid the fuzzy responsibility, which often exists in cross-department activities. Through the whole activity analysis, and combined the basic principles of responsibility accounting, the activity-based cost management framework is built to accounting the benefit of responsibility center accurately, and to make the "responsibility, right and benefit" be matched. Then the incremental benefit is regard as important evaluation indicators to encourage employee to actively participate, in order to achieve the continuous self-optimization of cost management. Finally, an applied study of L ltd. is made as an example. In the perspective of value creation, L ltd.’ core value is identified as product scheme value, project management value and additional value. Through analyzing the activity-chain of the core value, that matching cost activities, contract activities and project management activities, and evaluating investment benefit activities are found as core activities, and then to be optimized. Through dividing responsibility center, analyzing the activity cost drivers, demonstrating the accounting process, collecting the cost of each responsibility center, finally we evaluate the benefit of the responsibility center. Dividing the responsibility center involves many factors, which is found in the applied study, so we need to make intensive study to match the actual of enterprise practice.