What is self-financing? Definition and principles
Let's try to find out what self-financing is. This is a special economic category that expresses relations in the sphere of distribution, production, consumption, and the exchange of products. Many beginning entrepreneurs are trying to understand what is self-financing and how to use this economic term in their activities. In conditions of transition of the country's economy to a market option, this parameter is an important economic concept.
Features of cost accounting
This is a form of economic relations, materialinterest and responsibility between enterprises and the state, between the base company and its structural subdivisions, between enterprises, and also within the organization.
The introduction of cost accounting assumes rational management of the economy, recoupment of incurred costs, implementation of the economy regime, guaranteed profitability of the organization.
Essence of economic calculation
It is in the aggregate of funds andmechanism, thanks to which there is a final result - full-fledged production management. It is the full cost-accounting on the basis of commodity-money relations that guarantees the compliance of the resources of agricultural enterprises with the results of their direct activity. The system of such relations reflects the constant movement of resources, the renewal of the circulation of the company's funds. Arguing that such a self-financing, we note that he expresses the production relations that develop on the basis of financial and material resources in companies of all forms of ownership.
The scale of cost accounting
This term refers to the whole sphereindustrial relations, built on the basis of terms: money, value, commodity, cost, price, profit. The conditions of cost accounting are as follows: within the company there is interaction of economic categories according to existing laws in this area. It should be noted that the organization combines labor and means of production, in this connection, and directly the process of manufacturing products. The enterprise can include all the basic principles of cost accounting.
Features of agricultural organizations
The main development of cost accounting for such companies is determined by important principles:
- self-financing and recoupment of incurred costs;
- state regulation of the economy, as well as self-management of the collective;
- the material interest of individual workers for the result of production;
- control of financial activities of the organization.
Self-financing involves the coverage of allexpenses by the company at the expense of personal financial resources. The company's revenues from the sale of its products should be enough for the accumulation and consumption fund. The state has the right to regulate such market parameters as tax and interest rates, tariffs. Controlling their level, it gets the opportunity to create optimal conditions for the realization and production of goods.
How to make cost accounting effective
It will be effective if, in addition tothe principles mentioned above, each member of the work collective will perform qualitatively those duties that are assigned to it. If an employee does not have a personal financial interest, there will be no question of efficiency. A special incentive system for employees should be established at the enterprise. It includes a variety of bonuses, additional payments at the end of the year, material assistance. Only with the interrelation between the productivity of labor and decent pay will an employee be interested in the result, and the enterprise will be able to count on a significant profit.
In addition to material interest,such factor as the responsibility for the expenditure of monetary resources. There should be a liability for the use of material and financial resources. In reality, this principle presupposes the commensurability of costs with the results of economic activity at each stage of production. With constant control of the "ruble", full cost accounting for state enterprises is realized.
Importance of the financial and banking system for self-financing
It is financial institutions that carry out a permanentcontrol of timely payment of taxes by public and private enterprises. The use of credit sanctions by banking structures stimulates the heads of organizations to look for an effective application of all available resources. Such methods of influence on enterprises as returnability, targeted use of loans, urgency, allow banks to influence the circulation and manufacture of goods, promptly identify and offer ways to eliminate losses of mismanagement, unproductive expenses, check accounts. Cost accounting many companies are afraid, realizing that he has a lot of "pitfalls". This system is constantly being modernized, developing, keeping up with the changes taking place in the domestic and world economy. So what is cost accounting? It is a complex system in which all elements are interrelated.
Types of cost accounting
There is a division of self-financing in formorganization on an intraeconomic and general economic. The first option involves economic relations with the state or other companies of individual farms. Intra-economic calculation is related to the relationships in the enterprise itself, for example between separate units. Among the current methods of management leading positions belong to three variants of calculation: commercial, intrafirm, economic.
The economic calculation is spreading nowadaysto enterprises that are fully or more directly owned by the state. Its task is to ensure the effective activity of the organization aimed at full cost recovery, as well as dynamic development.
Commercial accounting functions in enterprisesall types of property, is aimed at obtaining maximum material profit. Commercial structures can rely on state assistance, cash loans or transfers. Cost accounting in this case depends on the volume of output, as well as the degree of independence (financial independence) of the company.
To reimburse the costs incurred, the ownerscompanies are looking for ways to reduce financial, material, labor resources. The peculiarity of this variant of self-financing is the provision of operational independence to the branches and divisions.
Intrafirm calculation emerged as a kind of financial relations within the company. Its task is to create a full-fledged, balanced activity of all branches of the company.
The interconnection of these three models is realized through an economic mechanism.
Elements of the mechanism of self-accounting
These include the following components:
- system of planning, stimulation, responsibility;
- a subsystem containing information, property, legal support;
- Subsystem, including cooperation, organization, specialization.
Self-supporting provides a stable workingcompany full recovery of incurred costs, a stable profit. The firm should receive such incomes which would completely cover production costs and had a good profit. The organization has a real possibility of complete independence in its economic activities. The company itself plans sales, production, employs employees, disposes of property. Any self-supporting enterprise has its own bank account, a full-fledged accounting system.
Each enterprise has its own settlement account inbank, can get loans from banks and other credit institutions. It also has an independent balance and a complete accounting system. If the employees perform their duties in an improper manner, material responsibility is assumed. If the enterprise does not fulfill the production plan, if its quality deteriorates, the production of defective products, and the irrational use of machinery and material resources, the company's revenues are significantly reduced. As a result, relations with customers, banks, suppliers of raw materials deteriorate, there are problems with paying taxes, paying wages to employees. The results can be very bad for the company, from administrative fines to complete bankruptcy.