Self-supporting is Principles of self-supporting

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The cost accounting system in economic theory is considered one of the most difficult to study. This category has a historically transitional character. The principles of cost accounting are determined by the law of value. Let's take a closer look at this category.

General characteristics

Cost accounting is one of the tools that is used in solving social and economic problems. It involves the use of cost categories and indicators that are adequate to them. Cost accounting is a method of eliminating contradictions between consumer value and the price of goods in the conditions of the functioning of a socially oriented market model.

Development Features

The introduction of cost accounting began in 1922. Initially, it was called commercial. With the consolidation of planning principles in the field of management, it became economic. Previously, enterprises were financed by budgetary funds. Funds were directed in accordance with the actual costs of the release of goods. With such financing, labor productivity almost did not increase. The introduction of cost accounting is aimed at creating an economic incentive for its growth. In addition, it provides savings in financial, labor and materialresources.

Introduction specifics

In socialist practice, several attempts were made to switch to such a system of financing. However, they all failed. There were many reasons for this. The main one was the lack of competition, the competitiveness of economic entities - sellers, owners, consumers. In market conditions, cost accounting is a necessary condition for business development. It is becoming one of the most important economic instruments.

Principles of cost accounting

The organization of financing is based on:

1. Cost ROI and profitability. Cost accounting is a tool that provides all normally operating organizations with reimbursement of production costs and income generation. Every company must make enough profit to cover costs and generate free capital.
2. Economic and operational independence. Each company is given the opportunity, at its own discretion, to dispose of property, plan production, sell products, and hire employees. All self-supporting enterprises have their own bank accounts and receive loans. Organizations have their own balance sheet, reporting.
3. Liability. The organization and its employees are responsible for non-fulfillment of obligations, irrational use of resources and other actions that are carried out in the course of work. If the company does not achieve planned targets, the quality of the goods decreases, downtime is allowed, marriage, and so on, then its incomedecrease. This circumstance has an impact on relationships with customers, consumers, suppliers, creditors. Delays in payment, deliveries, deductions to the budget begin. Accordingly, there are negative consequences for business in the form of sanctions.



4. Material interest. All operating expenses are covered by the company from its own funds. Thus, solvency and costs depend directly on profit. The better the company performs, the more stable its financial position. Efficient operation is important for the staff. This is due to the fact that an incentive fund is formed from income, which acts as a material incentive for employees.
5. Control of the ruble. This principle means that the outcome of the company's activities should depend on its contribution, and not on other reasons (inflation or the presence of a non-monetary market segment). Essential for such control is the procedure in accordance with which the financing of capital investments is carried out. By investing in production, banking institutions contribute to a more complete mobilization of resources and increase the efficiency of work.

Conclusions

As can be seen from the above provisions, the essence of the market model fully reflects the cost accounting. The year is taken as the reporting period. At the end of it, the results are analyzed. In the course of it, the strengths and weaknesses of the adopted concept of enterprise development are revealed. Based on the madeconclusions, tasks for the next period are formed.

Development of the model

With this method of managing, the question arises of transferring the principles given above from the enterprise as a whole to a specific employee. This, in particular, is about the formation of an internal model that acts as a tool for improving labor productivity. The effective operation of an organization in market conditions is possible with a clear and properly organized interaction of all departments, the interest of teams and individual employees in achieving high performance. As practice shows, the promotion of cost accounting as a method and principle of management at the level of primary links, based on a comparison of results with expenses, does not directly and directly stimulate employees and does not increase their responsibility for the results of their activities. In this regard, the approximation of the model to a specific employee is required. In other words, the goals and guidelines of cost accounting are transferred to intra-economic relations.

Key tasks

Internal cost accounting involves the financing of workshops, production units, services, departments and other units involved in economic relations. It is necessary for the efficient use of reserves and the achievement of better results in the work of the entire company as a whole. The key tasks of internal cost accounting are:

1. Strengthening the operational and economic independence of individual units with a simultaneous tightening of responsibility for the achieved indicators.
2. Effective coordination of collective activities.
3. Strengthening the interest of departments and employees in the results.
4. Formation of the mechanism of property interactions between the staff and the owners of the enterprise.
5. Improving the payroll system. In this case, the assessment of the final result of labor in the market will serve as the basis.
6. Improving the culture of production, working and living conditions of employees, strengthening social protection.
7. Increasing the social and labor activity of the team.

Internal cost accounting acts as an organic part of the overall economic system of the enterprise. It is formed by combining the independence of the unit and centralized planned management, profitability and payback, liability and interest, the unity of interests of each employee and the entire team as a whole.