2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
In the practice of any enterprise, be it a newspaper concern or a private construction company, there is such a thing as an estimated profit. It is extremely important when calculating the income and expenses of a legal entity.
Estimated profit is the estimated income of the enterprise minus the cost of work, intended to cover the costs of developing the organization, remunerating its employees and improving its social sphere. Its size is either calculated at the conclusion of each new contract, or negotiated between the customer and the company in advance. The second case, as a rule, is used when the standard industry-wide estimated profit cannot cover all the above-described expenses for the development of the company and material incentives for employees.
The estimated profit is not designed to cover overhead (indirect or unforeseen) expenses of the enterprise. They are usually calculated separately. These costs are then included in the estimate and paid on par with any other necessary costs.
Estimated profit is calculated as a percentage within the limits of the norm adopted by law. The basis for the calculation is the wages of workers, which, according to the standards, shouldbe at least 65% of the estimated profit. You should also take into account the average cost of work and the norm of the enterprise itself.
At large enterprises (for example, construction companies), a special package of documents is drawn up to regulate business relations between the customer and the construction company.
Estimated documentation is a complete set of necessary papers with data on the project, all its details, planned costs and expected profit. It indicates the prices for all types of work performed by the enterprise, as well as a detailed description of these same works with graphic drawings and diagrams.
Normative estimated profit in many industries is not yet well developed by Russian legislation. Therefore, in all disputable cases, enterprises deviate from accepted standards and set a contractual cost for their work. For example, at large construction sites where many people work, wages per worker are below average, so the construction company has the right to increase the estimated profit to ensure its further activities.
So, the estimated profit, or, as it is sometimes called, "net profit", is the income of the enterprise from any project, the funds of which are directed to improve its further work. Its size is determined depending on state, regional and local standards (norms established within the company, average wages, and so on). The value of the estimated profit does not have to be explained. After allif not for it, enterprises would lose the opportunity to develop, workers would lose their wages, and the entire industry would fall into decay. Therefore, it is extremely important to correctly calculate the estimated profit in order to maintain the optimal balance in the company, its development, and the relationship between it and the customer.
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