Self-financing is ... The principles of cost accounting

The system of cost accounting in economic theory is considered one of the most difficult to study. This category has a historically transient character. The principles of cost accounting are determined by the law of value. Consider this category in more detail.

general characteristics

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

Features of development

The introduction of cost accounting began in 1922. Originally it was called commercial. As the planned beginnings in the sphere of management were enlarged, it became economic. Before, enterprises were financed by budgetary funds. The funds were sent in accordance with the actual expenses for the release of goods. With this funding , labor productivity barely increased. The introduction of cost accounting is aimed at creating an economic incentive for its growth. In addition, it provides savings in financial, labor and material resources.

Specificity of implementation

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

Principles of self-financing

Organization of financing is based on:

1. Return on costs and profitability. Self-financing is a tool that provides all normal working organizations with reimbursement of production costs and income. Each company must make a profit sufficient to cover costs and generate free capital.
2. Economic-operational independence. Each company is given the opportunity, at its own discretion, to dispose of property, plan production, sell products, hire employees. All enterprises on self-financing have their own account in the bank, they 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 reach the planned targets, the quality of the product declines, simple, marriages are allowed, and so on, then its incomes decrease. This circumstance has an impact on relationships with customers, consumers, suppliers, and lenders. Delays of 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 enterprise from own funds. Thus, solvency and costs depend directly on profit. The better the company works, the more stable its financial position. Effective activity is important for staff. This is due to the fact that an incentive fund is formed out of income, acting as a material incentive for employees.
5. Control by 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 value for such control is the order in accordance with which the financing of capital investments is carried out. By investing in production, banking organizations contribute to a more complete mobilization of resources and increased efficiency of work.

conclusions

As can be seen from the above provisions, the essence of the market model fully reflects exactly the cost-accounting. The year is taken for the reporting period. Upon its completion, the analysis of the achieved indicators is carried out. In the course of it, the weak and strong sides of the adopted concept of enterprise development are revealed. Based on the findings, tasks are formed for the next period.

Development of the model

With this method of management, the question arises of transferring the principles outlined above from the enterprise as a whole to a specific employee. It is, in particular, the formation of an internal model, acting as a tool to improve the effectiveness of labor. Effective activity of the organization in the market conditions is possible with a clear and properly organized interaction of all units, the interest of collectives and individual employees in achieving high performance. As practice shows, the nomination of cost accounting as a method and principle of management at the level of primary links, based on the comparison of results with costs, directly and directly does not stimulate employees and does not increase their responsibility for the results of activities. In this connection, it is necessary to approach the model to a specific employee. In other words, the goals and orientations of self-financing are transferred to intraeconomic relationships.

Key Objectives

Internal self-financing assumes financing of shops, production units, services, departments and other units involved in economic relations. It is necessary for effective use of reserves and achievement of higher results in the work of the entire company as a whole. The key tasks of internal self-financing are:

1. Strengthening the operational and economic autonomy of individual units with simultaneous toughening of responsibility for the achieved indicators.
2. Effective coordination of collective activities.
3. Greater interest of units and employees in the results.
4. Formation of the mechanism of property interactions between the personnel and the owners of the enterprise.
5. Improvement of the payroll system. In this case, the evaluation of the final result of labor in the market will be the basis.
6. Improving the culture of production, working conditions and life of employees, strengthening social protection.
7. Increase of social and labor activity of the team.

Internal self-financing acts as an organic part of the overall system of managing the enterprise. It is formed by a combination of the independence of the unit and centralized planned leadership, profitability and payback, material responsibility and interest, the unity of interests of each employee and the whole team as a whole.