Formation of responsibility centers at the enterprise. Investment center. Where to get cost data

Mislavsky A.V. Head of Accounting Systems Design Department, Management Technologies and Accounting Systems Design Department, AKG RBS CJSC
Double entry No. 10 - 04.10.2005

The formation of the financial structure of the enterprise, namely the allocation of centers of financial responsibility (CFR), is the first step towards the creation of a budgeting system. Each division of the company contributes to the final financial result of the company (in the form of attracting income or making expenses) and should be responsible for its actions: to plan, to report on the results. It is on the delegation of responsibility that the budgeting process is built.

The advantages of switching to management in the CFD are obvious. By dividing responsibility between the departments, we determine who is really responsible for what at the enterprise, we get the opportunity to evaluate the results and quickly coordinate the actions of the departments, create a competent system of motivating employees to complete the assigned tasks. The attention of the head of the department is focused on the performance indicators of the center entrusted to him, the efficiency and validity of management decisions are increased. On the contrary, top management frees up time to carry out strategic tasks.

There are different centers

If we proceed from the understanding of budgeting as a management technology, and budgets as a management tool, the enterprise in this case will be the object of management.

A commercial enterprise as an object of management in the simplest version can be considered as a set of current activities (creation and sale of products, works or services) and investment. Current activities are inherent in costs (purchase of raw materials or finished products, production, sales costs) and income (revenue) from the sale of products, works or services. The difference between current income and expenses is defined as profit (or loss) from current activities.

Responsibility for income in a commercial company usually rests with the sales division (sales department or trading house). The costs are borne by all departments, but to a greater extent by the supply (purchasing) department, production departments, warehouses. Profit, in most cases, is determined for the entire enterprise, and decisions on its use are made by the company's management.

Thus, the activity of an enterprise as an object of management can be decomposed into separate processes: procurement, production, sales, investment. Accordingly, the structural units that manage these processes can be viewed as centers of responsibility for their implementation.

Based on the above functions, we define four main (1) types of the center of responsibility:

center of income;
cost center;
profit center;
investment center.

In practice, there are many more types of responsibility centers (for example, profit margin centers responsible for profit margins, or venture centers responsible for a company's innovative activities).

Let's consider the main types of CFD in more detail

Revenue Center - a structural unit responsible for the sales activities of the company. Its effectiveness is determined by maximizing the company's income within the resources allocated for these purposes. The question may arise, is the department responsible for sales the center of the cost of selling products (promotions, salaries of sales managers, etc.)? Of course, it is possible to define the sales unit as a cost center, but given their insignificant share in comparison with the amount of income (which is the income of the entire enterprise), we will still refer to it as the center of income. The budget management tools for this type of CFD are the Sales Budget and the Estimated Sales Costs (the purpose, structure of these documents and the procedure for working with them will be discussed in the following publications).

A cost center is a structural unit responsible for performing a certain amount of work (production task) within the resources allocated for these purposes. This type of CFD includes, as a rule, most of the company's divisions. First of all, production (workshops of the main and auxiliary production, service divisions). At the same time, the cost center may also have revenues (for example, revenue from the sale of services by the transport department to the outside), but if their value is insignificant, and the provision of these services is not the main business of the company, the CFD is defined as a cost center. The budget management tools for this type of CFD are the Production Budget (production program) and the Cost Budget (or Cost Estimate). As a kind of cost centers, procurement centers and administrative cost centers can be distinguished.

The procurement center is a kind of cost center; it is responsible for the timely and full supply of the enterprise with the necessary material resources within the limits allocated for these purposes. Such centers of responsibility include, for example, procurement departments. The budget management tools for this type of CFD are the Procurement Budget (may include transportation costs) and Cost Estimate.
An administrative cost center is a kind of cost center, it is responsible for the quality execution of management functions. This type includes the company's management apparatus, in most cases without dividing it into structural components (management, departments). The budget management tool for this type of CFD is the Estimated administrative costs.

The profit center is a structural unit (or the company as a whole) responsible for the financial result from current activities. In most cases, the management of the company is responsible for the current profit (or loss). In some cases, the company may have profit centers responsible for the financial result of a certain type of activity. A profit center can contain downstream revenue centers and cost centers. The budgetary management tool for this type of CFD (not counting the Budgets of sales, purchases, costs) is the Budget of Income and Expenditure (BDR).

Investment Center - a structural unit (or a company as a whole) responsible for the efficiency of investment activities. A traditional misconception is to designate as the center of investment a unit that plans and controls investment activities (for example, investment management). The fact is that the final investment decisions are made by the company's management and bears full responsibility for them. The budgetary management tool for this type of CFD is the Investment Budget, as well as the Forecast Balance (or Balance Sheet Budget). Enterprise-wide, as a rule, the center of investment coincides with the center of profit and, in this case, the center of responsibility is defined as the center of profit and investment.

Thus, the type of CFD determines the rights and responsibility of the structural unit for the financial indicators assigned to it, which are an integral part of the financial result of the company as a whole.

The set of interconnected and subordinate centers of responsibility represents the financial structure of the company, which is based on the organizational and functional structure, but does not always coincide with it. Several divisions of the company can be defined as one CFD (for example, the services of the management apparatus can be defined as a cost center headed by the head of the company), at the same time, several CFDs can be allocated within one structural unit (for example, within a trading house the center of income of wholesale trade and the center of income of foreign economic activity can be distinguished separately). When identifying the center of financial responsibility, it is necessary to take into account the possibility of a clear definition of the list of products, works or services provided to external clients or internal structural divisions. The financial responsibility center is characterized by financial independence, that is, its head must be able to determine and manage the financial result of the CFD. The activities of the responsibility center are planned and monitored through a system of key indicators.

"Key" digression

The purpose of this article is not a complete description of the system of key performance indicators of the Central Federal District, therefore, we will only briefly define them.

The key indicators for the revenue center are sales volumes, cash receipts, the status of accounts receivable, the volume of costs associated with the sale of products, for its own maintenance, etc.

The key indicators of the cost center are the volume of work performed (production tasks), quality indicators for output, the amount and structure of costs for output and its cost, indicators of the efficiency of the use of means of production and labor resources, etc.

The activity of the profit center is assessed by all of the above indicators, as well as by indicators of financial and economic efficiency of current activities: profitability, working capital structure, return on assets, etc.

The indicators of the center of profit and investment, in addition to those indicated, include indicators of the effectiveness of investment activities (payback period, ROI) and the financial condition of the enterprise as a whole (such as the coefficients of financial independence and stability, etc.).

The system of key performance indicators of the Central Federal District serves as the basis for building a budget model. Some of them can be directly included in budget forms (for example, a task for revenue), some are not directly related to budget indicators (for example, profitability). When using top-down budgeting, performance indicators also serve as the basis for the formation of budget assignments. In any case, when determining key performance indicators, it should be borne in mind that they must have a numerical value, be unambiguous and contained in accounting systems.

Step by step

Returning to the topic of financial responsibility centers, let us define the main stages of the formation of the financial structure.

First, it is necessary to determine the center of investment, that is, the unit responsible for the efficiency of using the profit obtained in the framework of current activities. In practice, in most cases, the center of investment is the enterprise itself as a whole, since only its management determines the investment policy, structure and amount of fixed assets and controls the financial condition of the company as a whole. Responsibility for the activities of the enterprise also includes the control of current activities, therefore, most often this center is defined as a center of profit and investment.

The profit and investment center includes dedicated revenue centers and cost centers. If there are structural divisions responsible for the financial result for certain types of business (for example, manufacturing enterprises that are part of the holding, having separate sales markets, their own suppliers, independently determining the pricing policy, but not making decisions on investing the profit obtained as a result of current activities), they form profit centers alongside revenue and cost centers. Profit centers can be formed not only on the basis of a separate structural unit, but also as part of several structural units of various divisions of the company, located within the same technological or product chain. Further, in the composition of such a profit center, its own, subordinate centers of income and cost centers are allocated. Subsequent allocation of centers depends on the complexity of the organizational structure and the need to delegate authority (for example, lower cost centers in the structure can be allocated as part of a cost center). An example of such a structure is shown in Fig. 1.

Rice. 1 Complex structure of the Central Federal District

Thus, a hierarchy of financial responsibility centers is built, which determines the financial structure of the company. The formed set of responsibility centers and their hierarchy is fixed by an internal regulatory document - "Regulations on the financial structure of the company", which includes a description of the types of CFDs, their composition and hierarchy, the powers of managers, the procedure for calculating (planning and accounting) financial performance based on the application of the system key indicators. This document is developed by the CFO (or a unit reporting to him) and approved by the CEO (President) of the company. Heads of structural divisions are empowered to make proposals for changes and additions to this document.

Summing up, it can be noted that we have considered only one of several components of budget management technology - management by financial responsibility centers. Other important components are: the system of key performance indicators of the Central Federal District, the budget model (composition and relationship of indicators of budget forms), budget regulations, the methodology of plan-fact and factor analysis of budget execution, and others. We will tell you about them in detail in the next issues of the magazine.

8.1. Building management accounting by responsibility centers

Allocation of cost centers and centers of responsibility is the basis of analytical management accounting in a construction organization. There are different classifications and names of centers of responsibility depending on the areas of application. We will consider the existing approaches to the construction of management accounting by centers of responsibility.

Under center of responsibility it is customary to understand a structural unit carrying out economic activities, headed by a leader (manager) who has a direct impact on the results of this activity and is responsible for them.

The classification of the centers of responsibility is based on the criterion of economic responsibility of managers, which is determined by the breadth of the powers granted to them. The basis for the formation of centers of responsibility is the organizational structure of the management of a construction organization. Depending on the scope of authority and responsibilities of the head, the centers of costs, income, profits, capital investments and investments, control and management, etc., are distinguished (Figure 8.1).

Rice. 8.1. Responsibility centers classification

Consider the centers of economic responsibility in the main areas of activity. Let's start with the cost center, the leader of which has the least management authority and is the least responsible for the results obtained.

Cost Center - it is the center of responsibility, the leader of which controls costs, but does not control profits and other economic indicators.

The cost center can coincide with an organizational unit (shop) or be part of it as a department (area). Some structural units may have two or more cost centers. The basis for the allocation of cost centers is the unity of the equipment used, performed operations or functions. The cost center accounting system aims only at measuring and recording the cost of entering the responsibility center. The results of the activity of the responsibility center (the volume of products manufactured, services rendered, work performed) are not taken into account, especially since in many cases it is either impossible to measure them, or it is not necessary.

In other words, a cost center is a structural unit in which rationing, planning and cost accounting can be organized in order to monitor, control and manage the costs of production resources, as well as assess their use. The center manager is responsible for the cost level.

Many construction organizations make the mistake of judging a cost center solely for its ability to control and reduce costs. For example, the head of the procurement department, who is responsible for the selection of suppliers and the price of materials, is also responsible for their quality. Managers are doing the right thing when assessing the performance of the cost center by its contribution to the success of a construction organization (timely execution of contracts, compliance with corporate ethical and economic obligations, employee safety).

When defining cost center tasks, consider the following:

Each center should be the responsibility of a supervisor or department head who will assist the organization's management in planning and controlling costs;

Each center should integrate construction machines and jobs, the costs of which are uniform. This makes it easier to determine the factors affecting the amount of costs of a given center, and the choice of a base for allocating costs by cost bearers. Since the main factor that determines the amount of costs in production areas is capacity utilization, it is most often chosen as the base for the distribution of costs in the centers. At the same time, at each production site, the utilization of production capacities should be as homogeneous as possible, which requires a deeper division of the organization into cost centers;

All costs should be easily charged to cost centers. With the deepening of the division of the organization into cost centers, the proportion of costs that are common to several cost centers increases, which necessitates their distribution.

Revenue center Is the center of responsibility, the manager of which is responsible for generating income, but not for costs. The activities of the heads of such divisions in the cost management system are assessed on the basis of the proceeds received or the amount of internal revenues, therefore, the task of accounting in this case will be to record the results of the activity of the responsibility center at the exit. This does not mean that there are no expenses in the divisions, but the costs of their maintenance are incomparable with the amount of income that they control. A revenue center is usually formed in the sales divisions responsible for the sales revenues for their divisions or even market areas.

Revenue center managers, like cost centers, can be responsible for achieving non-financial goals, such as ensuring competition in markets where the firm is in the first or second sales position. Some revenue centers control prices, construction product mix and sales promotion activities.

Since the efficiency of a construction organization can only be determined by the amount of profit, which is not the goal of cost and income center managers, profit and investment centers are often found in cost management systems of organizations.

Profit Center - this is a unit, the head of which is responsible for the income and expenses of his unit. The profit center manager makes decisions on the amount of resources consumed and the amount of expected revenue. The criterion for evaluating the activities of such a center is the size of the profit received. Therefore, accounting should provide information about the cost of entering the center of responsibility, about the costs within it, as well as about the final results of the unit's activity at the exit. The profit of the center of responsibility in the cost management system can be calculated in different ways. Sometimes only direct costs are involved in the calculations, in other cases they include (in whole or in part) indirect ones.

A profit center works in a similar way to a stand-alone business. The difference is that the level of investment in the center of responsibility is controlled by the management of the construction organizations, and not by the manager of the center. For example, if the head of a mechanization section of a construction company has the authority to make decisions on prices for services provided by him, the promotion of these services, the choice of suppliers of spare parts, fuel, oil, tires, etc., then this section can be assessed as a center arrived.

The centers of income and profit differ as a part and as a whole. Profit center managers (as opposed to cost center managers) are not interested in reducing product quality, as this will reduce their income, and therefore the profit by which their performance is assessed. The goal of this center is to maximize profits through the optimal combination of its defining elements: sales volume, sales prices, variable and fixed costs.

Profit center managers, as in previous cases, may be responsible for achieving certain non-financial results (customer satisfaction, etc.). Controlled revenues are not limited to sales revenues, they cover all revenues received.

The structure of profit centers is more complex than that of income centers. Profit centers are made up of multiple cost responsibility centers and one or more revenue centers. They are formed in separate structural divisions that do not have the status of a legal entity, but have a production cycle and a sales cycle for construction products or a cycle of purchasing and selling goods with the right to establish purchase and sale prices in a certain range.

Capital investment (investment) centers- subdivisions of organizations in the investment and construction sector, whose managers control not only the costs and revenues of their departments, but also the efficiency of using the funds invested in them. An investment center can be compared to an independent business, as a rule, it stands out in construction organizations with a high degree of decentralization.

Heads of investment centers (capital investments) have the greatest authority in management: they are delegated the right to make investment decisions, that is, to distribute allocated funds to projects. These centers operate with a capital investment budget or projected spending plan for the acquisition of long-term assets and the means to finance these acquisitions (Table 8.1).

Table 8.1

Characteristics of Responsibility Centers

According to their tasks and functions, the centers of economic responsibility are usually classified as main, auxiliary and accompanying. The main centers of responsibility produce construction products, for the manufacture of which structural divisions are created, auxiliary ones are intended for the production of products and services that meet the needs of the main production.

In relation to the production process, there are production and serving cost centers .

TO production workshops, sections, brigades belong, to servicemen - departments and services of management, warehouses, laboratories, etc.

The level of detail of cost centers in various construction organizations depends on the goals and objectives set by management to the cost control manager assigned to the center of responsibility. Generally, the degree of responsibility increases with the size of the cost center.

Responsibility centers are created for a clearer organization of cost control and regulation as a management function, providing personalized responsibility for the level of individual costs and expenses in the organization. The essence of this process consists in comparing the achieved results with the planned (or with the norms), analyzing the causes of deviations, establishing responsibility for them and taking the necessary measures.

Each responsibility center is part of the company's management system and has an entrance and an exit. The input is raw materials, materials, semi-finished products, labor costs and various services. The Responsibility Center uses these resources to get the job done. At the exit of the center of responsibility - products (products and services) that go to another center of responsibility or are sold to the side - to customers from outside. The activities of each such center can be assessed in terms of efficiency. Although the resources necessary for the production of goods (works, services), for the most part, have a natural-material form, for management control they are represented in monetary terms in order to combine physically dissimilar elements. The monetary measurement of resources is their cost. In addition to cost information, non-accounting information is used on such issues as the physical quantity of materials used, their quality, and the professional level of the workforce.

If the output of the Responsibility Center is sold to external customers, the result is measured as revenue. Goods or services transferred to other centers of responsibility of the organization are measured either in monetary terms (for example, as the value of the transferred goods or services) or in non-monetary terms (number of pieces of products).

In the domestic economy, construction organizations are represented mainly cost or revenue centers, at best - profit centers, investment centers are extremely rare.

In the practice of management accounting, the concept of "financial responsibility center" (CFR) is widely used. This is a structural unit that carries a responsibility for financial results. The allocation of the CFD is the first step towards the creation of a budgeting system. The types of financial responsibility centers are similar to the types of business responsibility centers:

The Investment Center has the right to manage working and non-working capital, including making investments;

The profit center is responsible for the amount of profit;

The Margin Center is responsible for the difference between revenue and variable costs;

The center of income (revenue) is responsible for the income that it brings to the organization in the course of its activities;

The cost center is only responsible for the costs incurred.

It is also possible to group the centers of responsibility according to other criteria, for example, according to the level of management: corporate, in-house structural divisions.

According to the principle of efficiency, the optimal solution will be the one that allows you to get the maximum result at a certain level of investment. The main task centers of responsibility - to minimize the investment required to achieve the desired result.

There are not enough financial indicators to assess the activities of the cost center. This approach can lead to cost savings by reducing product quality. Therefore, forming the structure of a construction organization solely as a set of cost centers, it is necessary to provide for additional quality control of construction products in the cost management system.

To ensure that the level of costs is regulated, it is important to plan and take into account only those costs in the center, which can be effectively influenced by its manager. Separation of responsibility is possible. For example, the cost of materials depends not only on their quantity (the head of the production department is responsible for this), but also on the price (the responsibility lies with the employee of the supply department). If deviations of actual costs from planned ones are revealed, responsibility should be personalized, since a person who is not authorized to control these costs cannot be responsible for their level.

For economic reasons, responsibility centers can be formed as self-supporting and analytical. Analytical centers are not economically isolated - they are not connected with the system of internal cost accounting. They provide analytical accounting and detailing of responsibility for individual costs. Self-supporting the centers exercise control, are responsible for costs and are interested in reducing them. For self-supporting centers of responsibility, separate analytical accounting is not kept, but information on cost centers is used.

The feasibility of a particular type of cost is determined by the people involved in the management process. The center of responsibility is a structural element of the construction organization, its economic subject, within which the manager is responsible for the costs incurred. The manager decides how to classify costs, how much to detail where they arise, and how to link them to responsibility centers.

Cost management by responsibility centers can be viewed as a method of intra-firm entrepreneurship, since their principles are similar:

Compliance with the technical and technological features of a specific construction industry;

Granting autonomy to structural units by delegating rights and responsibility for incurring costs, generating income, using investment resources (giving them the status of centers of responsibility of a certain type);

Personification of all elements of the intra-firm entrepreneurship system (definition of controlled items of costs and receipts);

Selection of approved and estimated indicators, etc .;

Organization of the activities of structural units on the basis of plans;

Comparison of all costs incurred by the center with the results achieved;

Consistency;

Compliance of information support with management needs (regulatory framework, relevant document flow, adequate software products and their technical support).

In most organizations, there is a division of responsibility among managers for performing tasks in an overall management structure. Such division often has a hierarchical structure, in which three levels are conventionally distinguished:

1. Lower level. A manager at this level is responsible for operational decisions on the development, approval and implementation of the production (work) plan of his department. In this regard, it is recommended to generate reports to provide managers with operational management information starting from the lowest level of responsibility, where you can directly influence the results of work.

Low-level planning involves getting very detailed information relevant to the moment. The decisions made are short-term, they relate to accounts receivable and payable, wages, the implementation of the schedule (plan) of work, the identification and analysis of deviations of the actual results from the planned ones.

2. Average level. It addresses the issues of effective use of resources to achieve better results, decisions are made regarding procurement, location (storage) of stocks of raw materials, materials and finished products, sales (based on the results of the analysis) and cash flow forecast.

3. Highest level. Responsibility centers are focused on strategic planning, which involves making decisions on the organization as a whole for the long term and determining the directions of its development. Decisions are made in relation to investments in certain projects, entering new markets (developing potential markets), forecasting and budgeting.

Operational information for different levels of responsibility centers should not be duplicated. For each center, goals and objectives, including accounting ones, are determined. It is necessary to indicate what information, with what frequency, where and by whom should be transferred. The work should be aimed at finding the necessary information and providing it to decision-makers, when they need it, and in a form that makes it suitable for practical use.

Based on economic considerations and the possibilities of delineation of responsibility, it is possible to give a reasonable description of any center of responsibility.

Management Accounting by centers of responsibility allows:

Simplify the procedure for maintaining synthetic and analytical accounting through the accumulation of information on deviation accounts;

Create conditions for generating reports on needs;

To increase the validity of the management decisions taken.

Problem assessing structural subdivisions in a construction organization usually boils down to the choice of indicators that best characterize the activities of the subdivision, as well as to assessing the fulfillment of planned targets and compliance with established norms and standards for these indicators.

Budgetary management is an operational system of enterprise management by centers of financial responsibility with the help of budgets. allowing you to achieve your goals through the most efficient use of resources. Consequently, the construction of a budgeting system is based on the concept of decentralized management and the allocation of CFD within the organizational structure of the enterprise. "

In passing, we note that the organizational and financial structure is functionally different. Financial structure shows how profit is formed. It reflects the structure of value, cash flows, the logic of the formation of the financial result. Organizational structure, in turn, determines the order of subordination of the divisions of the company (enterprise).

Management by centers of financial responsibility is one of the subsystems that provide internal management. As an independent system, it allows you to assess the contribution of each half of the division to the final results of the enterprise, decentralize cost management, monitor their formation at all levels of management and, on this basis, increase the economic efficiency of management.

When drawing up budgets, first of all, you need to focus on the business model. First, you need to understand how the value chain is arranged, what business processes the enterprise's activities consist of. Based on this, it is possible to form a financial structure that reflects the structure of activities and centers of responsibility for the result.

Thus, financial structure of an enterprise is a hierarchical system of centers of financial responsibility.

Generally financial responsibility center - This is a business unit or group of business units that carry out operations whose ultimate goal is profit optimization, which can have a direct impact on profitability, as well as be responsible to higher management for the implementation and compliance with cost levels within the established limits.

As a rule, the following centers of financial responsibility are distinguished: cost, income, profit, investment, control and management.

Cost Center - This is a structural unit or a group of business units whose managers control only costs (for example, a production site, a production workshop).

The formation of cost centers should be carried out taking into account the organizational and technological characteristics of the enterprise. The level of cost detailing will vary depending on the size of the organization and the objectives set by management. The head of the CFD has certain powers and financial responsibility for the costs incurred.

Income Center - This is a structural unit or a group of business units whose managers are responsible only for the proceeds from the sale of products, goods, services and for the costs associated with their sale (for example, marketing and sales units).

By identifying revenue centers, the management considers the latter to be the main indicator for assessing the performance of managers. Choosing income as the main assessment criterion, it should be borne in mind that the income of each CFD should be formed objectively, regardless of the amount of income for the organization as a whole, and that the growth of income of one center should not lead to a decrease in the income of another center.

Profit Center - This is a structural unit or a group of business units, the heads of which are responsible not only for costs, but also for the financial results of their activities.

An example of such a CFD can be subsidiary of the holding, located on a separate balance sheet. Profit center managers have more authority and responsibility than cost center managers. Managers control the income and expenses of the organization as a whole and are interested in increasing profits, since it is by this indicator that their work efficiency is assessed.

Investment Center - This is a structural unit or a group of business units, the heads of which are responsible not only for revenues and costs, but also for capital investments and the efficiency of their use.

Examples of investment centers are large subsidiaries of industrial holdings. The main goal of the investment center is to maximize the market value of the company.

Let's give a practical example of the formation of a financial structure on the example of a furniture company.

The article is devoted to issues related to the allocation of centers of financial responsibility at the enterprise and the formation of a cost accounting system in management accounting. Such data is especially necessary for top management in today's crisis conditions to make correct and timely management decisions.

How to design the financial structure of an enterprise based on the CFD?

When introducing management accounting in an enterprise, one may encounter a paradoxical situation when the same data comes from different services of the company: the numbers may (and will) differ, since each of the divisions previously collected information "for itself", as it considered correct ... Accordingly, one of the tasks is to reconcile the data compiled in different departments so that the financial and economic service can determine which indicators to use in management accounting.

In accordance with the theory and practice of corporate governance, individual companies, structural divisions, services, workshops, departments or groups are centers of financial responsibility (CFR). Their leaders are responsible for specific areas of work and the implementation of tasks set by management. Depending on the authority and responsibility of the heads of a structural unit, it can be a cost center, a revenue center, a profit center, or an investment center.

Cost center- subdivision (set of subdivisions), the head of which is responsible for the implementation of the assigned tasks within the allocated budget of costs. There are two main types of cost centers: a regulatory cost center and a management cost center.

Center for regulatory costs- subdivision (set of subdivisions), the head of which is responsible for achieving the planned level of costs per unit of production (work, services) (for example, production department, purchasing department).

Management Cost Center- subdivision (set of subdivisions), the head of which is responsible for achieving the planned level of total costs (for example, accounting, administration).

Revenue center- subdivision (set of subdivisions), the head of which is responsible for maximizing sales revenues within the allocated cost budget.

Profit center- a subdivision (a set of subdivisions), the head of which is responsible for maximizing profits (has the authority to make decisions that affect profits by both reducing costs and increasing revenues).

Investment Center- the center of responsibility, the head of which has the powers of the head of the profit center, and is also responsible for the level and efficiency of investments.

In practice, the financial structure of any enterprise can be described using the above types of financial responsibility centers.

Example 1

Let us consider an example of building the financial structure of the Fresh Wind company (conditional name), which trades in mass-market goods of several product groups on the basis of its branches in different regions.

The parent (management) company consists of divisions working in seven functional areas:

administrative activities;
marketing;
information Technology;
logistics;
warehouse activity;
purchases;
sales (by types of goods).

In addition, the organization has four branches in different regions, each of which consists of divisions that carry out the same activities as the management company.

For a more convenient and complete interpretation of management accounting data, it is recommended to assign a certain level to each CFD. For example, the first level corresponds to: the head (management) company and its territorial branches; the second - divisions, grouped according to the functional areas of the entire company; the third - separate structural divisions of the management company and branches. In accordance with certain levels, codes are assigned to each CFD. The company used six-digit codes to encode the Central Federal District in the information system being introduced: the first two digits indicate the territorial division of the company (10 - Parent company, 20 - Branch 1, etc.). The first two digits "00" in the Central Federal District code mean that we are talking about the entire company.

The second two digits indicate the direction of activity:

01 - Administration;

02 - Marketing;

03 - Information technology;

04 - Logistics;

05 - Warehouse activities;

06 - Purchases;

07 - General sales;

08 - Sales of the first product line (TN 1);

09 - Sales of TN 2;

10 - Sales of TH 3.

The second two digits "00" in the CFD code mean that we are talking about all areas of activity.

The last two digits indicate the unit number within the functional area or territorial unit. For example, the code "10 05 02" means that we are talking about the parent company (10), the functional direction "warehouse activity" (05), and the numbers "02" indicate the second division of the parent company within this functional direction (warehouse No. 1 ). The third two digits "00" in the Central Federal District code mean that we are talking about all subdivisions within the functional area or territorial subdivision.

Thus, aggregated data, for example, by the cost center of the second level 00 01 00 "Administration" reflect the costs of maintaining the administration of the entire company (holding) (total costs of maintaining the administration of the parent company and administrations of all branches).

Based on this, it is possible to form the financial structure of the company (holding) (Table 1).

Table 1. Financial structure of the company (holding)
Financial Responsibility Center Code	Financial Responsibility Center	Financial Responsibility Center Type	Financial Responsibility Center Level
	Parent (management) company	Investment Center
		Profit center
		Profit center

	Administration	Cost center
	Marketing service	Cost center
	IT management	Cost center
	Logistics management	Cost center
		Cost center
	Procurement Service	Cost center
	Sales service	Income center
	ТН1 sales	Income center
	Sales of TH2	Income center

	Administration of the parent (management) company	Cost center
	Marketing department of the parent company	Cost center
	Head office IT management	Cost center
	Parent company logistics management	Cost center
	Warehouse management of the parent company	Cost center
	Warehouse of 1 parent company	Cost center
	Warehouse 2 of the parent company	Cost center
	Project for the reconstruction of the warehouses of the parent company	Cost center
	Procurement service of the parent company	Cost center
	Parent company sales service	Income center
	Sales department TH1	Income center
	Sales department TH2	Income center

	Branch Office 2	Cost center
	Affiliate Marketing 2	Cost center
	Branch IT Management 2	Cost center
	Branch Logistics Management 2	Cost center
	Branch warehouse management 2	Cost center
	Procurement Department of Branch 2	Cost center
	Branch Sales Service 2	Income center
	Sales department TN1 branch 2	Income center
	Sales department TH2 branch 2	Income center

_____________________

It is currently recommended that each income center be treated as a separate project. Similarly, branches can be distinguished in such Central Federal District. Depending on the trajectory of the enterprise development (development / reduction), the organizational and financial structure of the company should be changed. Hence, the financial structure should be designed to accommodate newly emerging centers of financial responsibility... In connection with the crisis in the economy, a number of areas or branches can be recognized as unprofitable, and their functioning - inappropriate. With the correct planning of the financial structure, the disposal of one structural unit or product line should not destroy the overall financial structure of the enterprise.

Where can I get the cost data?

The head of the cost center is mainly responsible only for the formation of costs (costs), income and profit are not included in the scope of his personal responsibility. In turn, the head of the revenue center is responsible for generating revenue, but costs are not his responsibility. This is due to the fact that the costs in this unit are insignificant and cannot have a significant impact on the assessment of the activities of the head of such a center. For example, in the sales department TH1 of branch 2, the main task is to form a given amount of revenue, and the costs of maintaining the department are not so significant and they can be neglected so as not to distract the team from solving the main task.

The profit center is responsible for the income and expenses of that part of the business, which is supervised by the managers of this center. Their responsibility includes the excess of income over expenses, that is, profit. It should be understood that the center forms a conditional profit, but, by achieving the formation of its specified value, it has an unconditional positive effect on the overall financial result of the organization. Therefore, the sum of the profit of the centers and the sum of the total profit may not coincide.

The management accounting system by responsibility centers is created in fairly large decentralized organizations, operates in parallel with the usual accounting system or is built into it through branched systems of analytical accounts, is aimed at meeting the information needs of internal management, allows you to quickly monitor costs and results at different levels of responsibility and evaluate the work individual managers and responsibility centers based on primary analysis of deviations; serves as a signaling system.

Important!

The management accounting system can be implemented and perform the tasks assigned to it only if the areas of responsibility of individual managers, the necessary controlled indicators and items are clearly defined.

Flexible estimate (budget)- a method of planning costs in management accounting. Estimated costs are included in the estimate for different levels of business activity. A flexible estimate is drawn up on the basis of an analysis of the behavior of fixed and variable costs and allows you to recalculate the planned cost items depending on the achieved level of volumetric indicators affecting these items. An example of a flexible cost estimate by center of responsibility is presented in table. 2.

Table 2. Flexible cost estimate
Expenditures	According to the estimate	In terms of the volume of transactions	The actual	Deviations
Expenditures	According to the estimate	In terms of the volume of transactions	The actual	saving	overrun
Variables:
materials
salary
Permanent:
depreciation


Total

As you can see, the production target for this period was fulfilled by 101.2%. It is possible to more accurately estimate deviations in variable costs by recalculating material costs at the rate per unit by multiplying by the total number of units issued, by wages - based on the rate of payment per unit multiplied by the total number of issues.

Note!

Separate accounting of variables (cost) and fixed costs (administrative and commercial) in planning, accounting and analysis allows you to correctly distribute the expected and actual results to the centers of responsibility.

Cost data can be taken from primary accounting documents. In addition, in relation to certain types of costs (as a rule, direct production costs), operational data on the actual consumption of basic resources can be used (for example, technological norms for the consumption of raw materials, readings of metering devices for electricity consumed for technological purposes, etc.). ).

Cost information is reflected in accounting depending on the selected method... When accounting for actual costs, costs are written off as many resources as they were consumed according to the data of primary documents; when accounting for planned costs, technological standards for the release of materials, raw materials or other resources into production are established. The calculation of the amount of consumed resources is based on the price multiplied by the planned resource consumption, which is set for a given type of product. In this case, the deviation of the actual costs from the planned ones must be recorded in the accounting in cost and quantity sections. This information allows you to plan and control the rates of consumption of basic resources in the production process.

How to properly organize the maintenance of accounts for management cost accounting?

Production costs in management accounting are reflected in three directions, each of which is a system of interrelated accounting records:

by cost elements;
by cost items;
by responsibility centers - cost centers.

Management accounts, which reflect analytical information about current production costs, data for their control by centers of responsibility and for calculating the cost in market conditions, as a rule, constitute a commercial secret of the enterprise.

In foreign practice, management and financial accounts are kept separately. Management accounts are separated from financial accounts in such a way that each group of them is generalized as a separate financial system, not connected to each other by any general accounting entries.

In Russian practice, such an opportunity arose in connection with the introduction of the Chart of accounts for accounting of financial and economic activities of the organization (hereinafter referred to as the Chart of accounts), approved by Order of the Ministry of Finance of Russia dated October 31, 2000 No. 94n (as amended on November 8, 2010; hereinafter - Order of the Ministry of Finance of Russia No. 94n) (section III "Production costs").

In the explanations to section III "Production costs" of the Instructions for the application of the Chart of accounts for accounting of the financial and economic activities of the organization approved by Order of the Ministry of Finance of Russia No. 94n, it is said that the formation of information on costs for ordinary activities (production costs) is carried out either on accounts 20 -29, or on accounts 30-39. In the first case, the primary accounting and costing scheme is formed in a single chart of accounts for accounting of all operations of a given organization. In the second case, accounts 20-29 can be used to group costs by cost items, places of origin and other characteristics, to calculate the cost of products, works, services; accounts 30-39 are used for accounting by item of expenditure.

Section III "Production costs" of the Chart of Accounts contains only seven accounts with a specific content. The remaining thirteen accounts are not indicated, their content is not indicated. The composition of unmarked accounts in accordance with the instructions for the Application of the Chart of Accounts is established by the organization based on the characteristics of its activities, structure, management organization.

Accounts 20-29 relate to management accounting... They are lined up in strict accordance with the methodology of accounting for costs by cost items (Table 3).

Table 3. Management cost accounting accounts
Cost accounting accounts	Cost items
Account 20 "Main production"	1. Raw materials and materials
	2. Returnable waste (on account 20 credit)
	3. Purchased products, semi-finished products and services of a production nature from outside
	4. Fuel and energy for technological purposes
	5. Wages of production workers
	6. Social contributions
Account 23 "Auxiliary production"	Cost items 1-6 to account 20 "Main production"
Account 25 "General production costs"
Account 25 "General production costs"	8. General production costs
Account 26 "General expenses"	7. Expenses for preparation and development of production
	9. General operating expenses
	10. Other production costs
Account 28 "Marriage in production"	11. Losses from marriage

Production cost accounting accounts should be supplemented with reflecting account 27 "Distribution of total costs" for mirroring the information generated in financial accounting on account 37 "Reflection of total costs".

Account 27 "Distribution of total costs" serves to record the costs accounted for by elements during the reporting period. The amount of expenses by elements recorded in financial accounting on the debit of account 37 "Reflection of total costs", in turn, is simultaneously recorded on the credit of account 27 "Distribution of total costs" in correspondence with accounts 20-29, on which costs are formed by items, calculation objects, places of origin (centers of responsibility).

Note!

Between accounts 27 and 37, in the process of recording primary data on expenses for ordinary activities, full equality is maintained. The turnovers and balance on the debit of account 37 "Reflection of total costs" are always equal to the turnovers and balance on the credit of account 27 "Distribution of total costs". This equality is ensured without direct correspondence of accounts 27 and 37 as a result of the fact that entries in both accounts are made on the basis of a single array of primary documents, accounting certificates and calculations that formalize the organization's expenses for ordinary activities for the reporting period.

How to develop a management accounting classifier and codifier?

Management accounting classifiers define and describe various accounting objects with the aim of their unambiguous interpretation by all participants in the planning, organization, incentive and control processes at the enterprise. Each company determines the number and types of classifiers used based on its needs. The most common classifiers of management accounting used in Russian companies are:

types of products manufactured, works and services rendered;
types of income;
financial responsibility centers;
cost centers;
types (economic elements) of costs;
costing items;
types of assets;
types of obligations;
types of equity capital;
projects;
directions of investments;
main and auxiliary business processes;
types of clients;
categories of personnel.

Management reporting on key performance indicators (KPI) can be generated as follows (Table 4).

Table 4. Grouping of key performance indicators for management reporting purposes
Indicators	Examples of
Indicators characterizing the efficiency of the business as a whole
Shareholder satisfaction metrics	The profitability of the asset; profitability of cash flow; company value
Customer satisfaction metrics	Customer turnover; the number of regular customers; number of customer claims
Personnel satisfaction and performance indicators	Labor productivity; staff turnover
Indicators characterizing the efficiency of business processes and individual functional areas
Indicators of efficiency of storage and movement of goods	The speed of commodity circulation; storage loss cost
Production efficiency indicators	Volume of production; production nomenclature
Sales performance indicators	Share of discounts in sales; coverage of the client base; profitability of sales
Quality indicators	Certification costs; share of marriage
Personnel performance indicators	Payroll-to-sales ratio; staff turnover; number of employees hired in relation to the number of applicants
Financial performance	Liquidity indicators; turnover indicators; profitability indicators; operating lever

For your information

A sequential numbering is introduced inside each classifier. If there is a need to detail accounting objects, you can use a multi-level code structure.

Classifiers and codifiers play an important role in the automation of management accounting.

Example 2

For the purposes of management accounting and detailing of costs, account number 23 "Auxiliary production", for example, can be represented as follows:

where the first two characters are the account number according to the Chart of Accounts (account 23);

the following three signs are assigned on the basis of the classifier "Type of products (works, services) for auxiliary production" (stamps for cold and hot metal processing);

the next three characters are taken from the classifier "Expenditure item for auxiliary production" (materials, fuel and energy, etc.);

the last character is free characters.

Then the sub-accounts of the manufacturing enterprise, opened to account 23 "Auxiliary production", will look as follows (Table 5).

Table 5. Detailing of costs for account 23
Sub-account number	Accounting object name

	Manufacturing of dies for hot and cold metal working
	Materials (edit)
	Purchased semi-finished products

	Fuel and technological energy
	Basic salary
	Deductions
	Cost of special equipment

	Workshop costs
	Losses from marriage

_____________________

What data is reflected in the accounts of management cost accounting?

Score 20"Primary production" reflects the direct costs of manufacturing products, performing work, rendering services, which are the main, profile in the activities of the organization. The debit of account 20 "Main production" reflects the direct costs associated with the production of products (works, services) in correspondence with account 27 "Distribution of total costs". In correspondence with account 23 "Auxiliary production" in the debit of account 20 "Main production" the costs of auxiliary production are written off associated with the products produced, work performed, services rendered in the main production.

Indirect general production costs related to the divisions of the main production, and losses from defects are monthly written off to the debit of account 20 "Main production" in correspondence with accounts 25 "General production costs" and 28 "Defect in production". As a result, information about the reduced production cost is generated on account 20 "Main production".

At the end of the reporting year, account 20 "Main production" is closed by an accounting entry on the credit of the named account to the debit of account 27 "Reflection of production costs". In the next reporting year, records on account 20 "Main production" begin with a zero balance.

The specifics of management accounting for self-produced semi-finished products is such that production costs for the remainder of semi-finished products are reflected as a debit balance account 21 "Semi-finished products of own production". This balance is not closed at the end of the reporting year, but is transferred to the management accounting of the next reporting year. The carryover balance on the debit of account 21 "Semi-finished products of own production" is balanced by the carryover balance on the credit of account 27 "Allocation of total costs". On the debit of account 21 "Semi-finished products of own production" in correspondence with account 20 "Main production" reflects the cost of production of semi-finished products received at warehouses and storages. On the credit of account 21, again in correspondence with account 20 "Main production", the costs of semi-finished products transferred for further processing to other redistributions or sold to third-party organizations and persons are written off.

On account 23 "Auxiliary production" reflects information on the costs of the enterprise for products and services that are auxiliary to the main production. Direct costs of auxiliary production are recorded on the debit of account 23 "Auxiliary production" in correspondence with account 27 "Allocation of total costs". Expenses for the management and maintenance of subsidiary production units are recorded on the debit of account 23 “Auxiliary production” in correspondence with account 25 “General production costs”. On the credit of account 28 "Defect in production" in the debit of account 23 "Auxiliary production" losses from scrap arising in the subdivisions of auxiliary production are written off.

Note!

Reflection of the costs of auxiliary production in management accounting necessarily leads to the fact that, under certain conditions, a balance is formed on the debit of account 23 “Auxiliary production”, which characterizes the unclosed costs of the auxiliary production units, that is, in fact, work in progress. The balance cannot be excluded, and it is determined in management accounting at the end of each month. In addition, this balance is not closed at the end of the reporting period and is transferred to management accounting for the next reporting year.

By debit account 25 "General production costs" reflects data on the costs incurred for a certain period of time (calendar month) in correspondence with account 27 "Distribution of total costs". The monthly amount of actual expenses is reflected in the credit of account 25 "General production expenses" in the debit of accounts:

20 “Main production” - for the amount of expenses in the main production units;
23 “Auxiliary production” - for the amount of expenses in the subdivisions of auxiliary production;
28 "Rejects in production" - for the amount of costs attributable to rejected products;
29 "Service industries and farms" - for the amount of costs in the subdivisions of service industries and farms.

On account 26 "General business expenses" reflects information on the costs of a general management nature that are not directly related to production processes, as well as on costs included in the cost item "Other production costs". On the debit of account 26 "General business expenses" in correspondence with account 27 "Distribution of total costs" all the costs associated with this account are recorded. After the completion of all operations of the reporting year, account 26 "General expenses" is closed by an accounting entry on the credit of the named account to the debit of account 27 "Allocation of general costs".

Account 28 "Marriage in production" serves to reflect information about the cost of the detected marriage, the costs of correcting it and identifying the final losses from the marriage in a given period. The usual cycle for identifying waste from rejects is one month.

Expenses for rejected items that are not subject to correction (final marriage) are recorded on the debit of account 28 "Marriage in production" in correspondence with accounts 20 "Main production" and 23 "Auxiliary production". Additional costs for correcting the marriage are also charged to the debit of account 28 "Defect in production" in correspondence with account 27 "Allocation of total costs". The costs associated with the correction of the marriage are reflected at a reduced production cost, therefore, the debit of account 28 "Defect in production" records the corresponding part of the general production expenses by posting to the credit of account 25 "General production expenses".

Losses from marriage recorded on the debit of account 28 "Manufacturing marriage" are reduced by the value of the rejected items at the price of possible use, as well as by the amounts to be recovered from the perpetrators of the marriage - the organization's personnel or suppliers of substandard materials and semi-finished products that led to the marriage. In management accounting, these compensations are recorded on the credit of account 28 "Marriage in production" in the debit of account 27 "Reflection of production costs". Note that account 28 "Defect in production" has no balance at the end date (end of the month).

On account 29 "Serving production facilities and farms" reflects the costs of service industries and farms on the balance sheet of the organization that are not directly related to the main production activity of the organization (for example, the costs of a recreation center, a canteen, other service divisions).

The sums of costs are recorded on the debit of account 29 "Service industries and farms" in correspondence with account 27 "Distribution of total costs". Indirect costs for the management of service divisions are monthly recorded in the debit of account 29 "Service industries and farms" in correspondence with account 25 "General production costs".

In the management accounting on account 29 "Serving production and economy" information on costs is reflected cumulatively, on an accrual basis from the beginning of the reporting year. The debit balance at the end of each reporting month reflects the amount of costs posted since the beginning of the reporting year, which makes it easier to control costs by responsibility centers and estimated items.

What are the features of reflecting costs in management accounting?

The normative basis for reflecting costs in management accounting is the Accounting Regulations “Organization's Expenses” PBU 10/99 (hereinafter referred to as PBU 10/99), approved by Order of the Ministry of Finance of Russia dated 06.05.1999 No. 33n (as amended on 06.04.2015). Consider the options for reflecting costs in management accounting.

Ioption

In accordance with PBU 10/99, expenses for the types of activities of the organization, for which product sales are reflected through account 90 "Sales", are formed according to the following elements:

material costs;
labor costs;
deductions for social needs;
depreciation;
other costs.

To account for each element, it is possible to maintain a separate management account. In section III of the Chart of accounts of accounting "Production costs" you can open the following accounts:

30 "Material costs";

31 "Labor costs";

32 "Contributions for social needs";

33 "Depreciation";

34 "Other costs";

37 "Reflection of total costs".

On the debit of account 30 "Material costs" in correspondence with accounts 10 "Materials", 16 "Deviations in the cost of material assets", 60 "Settlements with suppliers and contractors" reflects the cost of consumed materials, purchased energy, industrial work performed by third-party organizations, the material component of other expenses in correspondence with the corresponding accounts ... For account 30, you can open subaccounts by type and direction of material costs.

On the debit of account 31 "Labor costs" in correspondence with accounts 70 "Payments with personnel for wages", 96 "Reserves for future expenses" reflect the amount of accrued wages, including all forms of bonuses and other forms of remuneration of personnel, including top management. This account reflects various social payments at the expense of the organization, which cannot be written off to the debit of account 69 "Settlements for social insurance and security". The debit of this account includes: accruals to reserves for the forthcoming payment of vacations, for the payment of annual remuneration for length of service, etc. It is recommended to keep subaccounts to this account, characterizing the types and directions of labor remuneration..

On the debit of account 32 "Social contributions" in correspondence with account 69 "Settlements for social insurance and security" reflect the amount of social payments (subaccount 1 - calculations for social insurance, subaccount 2 - calculations for pensions, subaccount 3 - calculations for compulsory health insurance).

On the debit of account 33 "Depreciation" in correspondence with accounts 02 "Depreciation of fixed assets", 04 "Intangible assets", 05 "Depreciation of intangible assets" the organization's expenses for amortization are reflected, accrued in accordance with the accepted methods and rates of amortization.

On the debit of account 34 "Other costs" in correspondence with accounts 60 "Settlements with suppliers and contractors", 71 "Settlements with accountable persons", 76 "Settlements with various debtors and creditors", 79 "On-farm settlements" and other accounts reflect expenses that were not reflected in other accounts for accounting for costs by economic elements, since they do not relate to any of them.

Important!

Maintaining sub-accounts in this case is mandatory, since the expenses reflected in the account are heterogeneous, which can distort information and, as a result, management decisions.

Monthly accounts for accounting for cost elements are closed in the debit of reflecting account 37 "Reflection of total costs" with the following entry:

The debit of account 37 "Reflection of total costs" Credit of account 30 "Material costs", 31 "Labor costs", 32 "Social contributions", 33 "Depreciation", 34 "Other costs".

The sums collected on account 37 are distributed between the calculation accounts and recorded in the debit of accounts 20 "Main production", 23 "Auxiliary production", 25 "General production costs", 26 "General expenses", 29 "Service production and households", as well as in the debit account 44 "Costs of sale".

Important!

Although the number of accounts increases, the number of accounting entries (account correspondences) is reduced, since reflective screen accounts are used.

IIoption

All expenses of the organization for ordinary activities are grouped on accounts 30-34 by cost elements. Monthly, these accounts are closed in the debit of account 37 "Reflection of total costs". At the same time, the same amount of costs is recorded on the credit of the reflecting account 27 "Distribution of total costs" in correspondence with accounts 20 "Main production", 23 "Auxiliary production", 25 "General production costs", 26 "General expenses", 29 "Service industries and facilities ".

On accounts 20, 23, 29 reflect the direct costs of production in an analytical context by divisions (cost centers), which ensures control over deviations from norms or from standard (planned) costs.

On account 25 group production overheads according to the estimates of production units (branches, workshops, sections, etc.). This allows you to control the deviations of the actual costs by budget items.

On account 26 group general management overheads to monitor compliance with estimates by branches, management units and other centers of responsibility (cost centers). On a separate sub-account 26, commercial and other sales expenses are grouped for detailed accounting and monitoring of compliance with estimates by the relevant commercial and trade divisions.

Accounts 25, 26 are closed on a monthly basis, debiting the amounts collected on them to the debit of accounts 20, 23, 29. Thus, it is possible to calculate the reduced and full production cost of products (works, services), even taking into account commercial expenses.

To accounts 20, 23, 29 it is necessary to keep two sub-accounts: 1 "Remains of work in progress" and 2 "Calculated expenses for the reporting period". At the end of the reporting year, the estimated costs are closed with the entry:

The debit of account 27 "Distribution of total costs" Credit of account 20 "Main production", 23 "Auxiliary production", 29 "Serving production and economy".

Account 37 "Reflection of total costs" is closed monthly by posting the amount recorded in it on the credit of account 37 in correspondence with the accounts:

15 "Procurement and acquisition of material assets" - for the amount of expenses for the procurement and delivery of inventories to the organization;

40 "Release of products (works, services)" - for the costs of release of products, performance of work, provision of services, including general management costs. The latter are recorded on a separate subaccount and are monthly written off directly to the debit of account 90 "Sales" as expenses of the reporting period;

44 "Costs of sale" - for the amount of selling and distribution costs for the reporting period;

other accounts depending on the nature of the current costs of ordinary activities.

Let's consider a conditional example of using management accounting accounts.

Example 3

The company uses the following management accounting system (Table 6-8).

Table 6. Management accounts and examples of data records
	Account debit	Account credit	Sum
Costs by item are regrouped and recorded under management accounts

Waste of raw materials and materials written off at the price of possible use
The cost of the revealed marriage

Written off general production costs of subsidiary production units
The cost of products and services of auxiliary industries transferred to the main production
Written off the general production costs of the main production and related to the correction of defects

Amounts recovered as compensation for losses from marriage
The final amount of losses from marriage is written off in the costs of the main production

Table 7. Reflection of account balances
Check	Account name	Record No.	Turnover		Balance
Check	Account name	Record No.	by debit	on a loan	by debit	on a loan
	Primary production





Total
	Auxiliary production



Total
	General production costs


Total
	General running costs
	Reflection of production costs


Total
	Defect in production




Total
	Service industries and farms

Table 8. Balance of management accounts
Check	Turnovers		Balance
Check	by debit	on a loan	by debit	on a loan







Sum

________________

So, we examined the general provisions regarding cost accounting in management accounting. Based on this information, management makes important management decisions, so it must be timely, complete and up-to-date. Let's also pay attention to the following: in times of crisis, most managers prefer to cut staff in order to cut costs. However, practice shows that after a significant reduction, the enterprise cannot be fully restored. Qualified personnel are leaving, who do not return when the situation stabilizes. Therefore, this article is intended to help management understand other cost items that can be reduced without reducing production personnel.

Investment Center(investment center) - a structural unit of an enterprise, the head of which is responsible for using the allocated to him and obtaining the necessary from investment activities.

Investment Center - a company or a division of a company; responsible for the efficient use of investments and making a profit, and has the necessary resources and authority to affect the profitability and return on investment, increase income and reduce costs within its division.

Heads of investment centers (capital investments) have the greatest authority in management: they are delegated the right to make investment decisions, i.e. distribute allocated funds to projects. These centers operate with a capital budget or projected spending plan for the acquisition of long-term assets and the means to finance those acquisitions.

Examples of investment centers are large industrial ones. The main goal of an investment center is to maximize the market value of the company.

Investment Center - a structural unit (or a company as a whole) responsible for the efficiency of investment activities. A traditional misconception is to designate as the center of investment a unit that plans and controls investment activities (for example, investment management). The fact is that the final investment decisions are made by the company's management and bears full responsibility for them. The budget management tool for this type of financial responsibility center is the Investment Budget, as well as the Forecast Balance (or Balance Sheet Budget). Enterprise-wide, as a rule, the center of investment coincides with the center of profit and, in this case, the center of responsibility is defined as the center of profit and investment.

An investment center (venture center) is a structural unit (or a group of units) that carries out a certain set of basic and (or) supporting activities and is capable of having a direct impact on the income, expenses and efficiency of this activity, the profit from which is expected in the future. Such venture centers can be newly formed divisions that are engaged in new business areas.

Naturally, at the initial stage, these divisions may not generate any income at all, but the cost part can be significant. In the future, when the business is more or less delivered, these divisions will generate income and profit, after which this venture center can be transferred to the status or.

Of course, it may turn out that the investment project will not work, and it will have to be closed. In some companies, when establishing a new venture center, they act as follows: the head of the venture center is given a certain period, say six months, for his investment center to start making a profit at the end of this period, and the payback period does not exceed a year. In most cases, a project for the formation of venture centers is considered only if available, which then serves as the main tool for monitoring the activities of a venture center.

The following indicators can be used as criteria for evaluating the work of investment centers, depending on the company's strategy:

return on invested capital (ROI);
payback period;
profit;
other indicators of the business plan.