The official business definition of cost savings versus cost avoidance is a key concept for any business to understand. Cost savings is the reduction of expenses by reducing the amount of money spent on a particular item or service. Cost avoidance, on the other hand, is the prevention of future costs by taking proactive steps to reduce the potential for those costs to occur. For example, a company may choose to invest in preventive maintenance to avoid the cost of major repairs in the future. In addition, a company may choose to invest in training to avoid the cost of hiring and onboarding new employees. Both cost savings and cost avoidance are important components of a successful business strategy. Cost savings can provide immediate financial relief, while cost avoidance can help a business save money in the long run. By understanding the difference between cost savings and cost avoidance, businesses can make informed decisions about how to best manage their finances.