How to manage administrative expenses?

In the process of operating activities , any enterprise has costs that are not included in the cost of services, works or products. They are reflected in the period in which they appeared. Such costs include administrative expenses.

Definition

Costs that are not included in the cost price include costs that are not related to commercial or industrial activities. These costs are called administrative costs. Included in these costs are:

1. On the maintenance of the personnel of the management apparatus of the enterprise and its structural subdivisions. The budget for administrative and management expenses includes funds that are used for logistical and transport support, including servicing of official vehicles and compensation for the use of personal vehicles for the performance of professional duties.
2. Operation and maintenance of structures, buildings, equipment, premises, equipment and so on.
3. Payment of business trips related to the professional activities of employees.
4. Maintenance and maintenance of technical equipment (alarms, communication centers, etc.).
5. Reception of representatives of other enterprises who came to the negotiations to establish cooperation, participants of audit commissions, boards of directors.
6. Payment of communication services.
7. Settlement of litigation.
8. Audit, consulting, information services.
9. Payment for managerial activities implemented by third parties, if the functions are not provided for in the staffing table or in job descriptions.
10. Payment for the provision of services to housing and utilities organizations to ensure resource saving, regulation and accounting of gas, heat, and water consumption.
11. Implementation of mandatory annual, as well as proactive audits of financial and economic activities.
12. Settlement and cash services and other banking services.

Recognition of costs

Costs are recognized when economic benefits are reduced, provided that it is possible to reliably estimate its value. Cost accounting is carried out together with a growth in liabilities or a decrease in assets. For example, when calculating wages or calculating depreciation. Administrative costs related to the management and services of the organization as a whole are accounted for by acc. 92.

Articles

Administrative costs associated with the payment of the executive staff are accounted for according to the nomenclature of posts. In particular, the accrued remuneration of the director of the company, his deputies, employees of the economic and accounting departments, chief engineer, secretary-typist and so on. Transferred to the D-tsc. 92. At the same time credited cc. 66. Under the item "Deductions for social activities" contributions from the calculated salaries of the staff of the management apparatus are taken into account. At the same time, account 92 is debited, and sc. 65 is credited. According to the article "Business trips", the expenses of the staff of the management apparatus, the sum of the lifting ones, are taken into account. In this case, debits the invoice. 92, and accounts 30, 37 are credited.

Other administrative expenses

This article takes into account costs:

1. On stationery, telegraph and mail.
2. Cost of forms of accounting, reporting, planning documentation.
3. Litigation. It should be said that the law allows the return of funds spent on litigation. For example, an enterprise may seek recovery of court costs in an administrative case against respondents in the event that its claims are met.
4. Repair, depreciation, lighting, water supply, heating of buildings.
5. The maintenance of service cars, sentry, fire services.
6. Remuneration for audit, legal and other services.
7. Settlement and cash and other banking services.

In these cases, also debited. 92. Accounts are credited:

1. Amortization of non-current assets (13).
2. Production reserves (20).
3. Settlements for other operations (68).
4. Wearable and low-value objects (22).
5. Cashier (30).
6. Settlements with employees (66).
7. Bank accounts (31).
8. Calculations of taxes (64).

Documentation

The primary sources of information on administrative costs are:

1. Accounts and reports on the use of funds provided for business trips.
2. Overhead.
3. Accounting calculations.

Write-off of expenses is made out by the inquiry. Based on it, deb. 91 and credited with the invoice. 92. Analytical accounting is made in the report in the context of cost items aimed at management and maintenance of production.

Economic justification

Any administrative costs of the enterprise should be justified. Expenses are recognized as such if their implementation is justified from the economic point of view and their valuation is expressed in monetary form. In accordance with Art. 252 NC, the reasonableness of the incurred costs is determined not only by actually received income in a particular reporting period. An important condition is the focus of costs on the extraction of profits.

Criteria of validity

As practice shows, the lack of a method by which the cost of management services is determined can not serve as a basis for not recognizing the justification of expenses. This conclusion is present in the resolution issued by the Federal Antimonopoly Service of the Urals District on April 4, 2007. The increase in sales revenue and profit growth undoubtedly point to an economic justification for costs.

Outsuffing and outsourcing

Any enterprise has at its disposal a limited amount of resources. Sooner or later, the head of the organization needs to reduce costs in all areas, by which it is possible. In such situations, as a rule, first of all, the reduction of administrative and administrative expenses begins . Various measures are taken for this purpose. Changes in administrative expenses can have a serious impact on the financial condition of employees. However, in many cases this is completely justified.

Outstaffing is actively used abroad. It represents the withdrawal of employees from the state. However, they do not stop working. They continue to fulfill their professional duties, but on several other conditions.

Another way to cut costs is outsourcing. In this case, non-core functions are taken outside the company's activities. They can be, for example, accounting, jurisprudence, marketing and so on. If necessary, the enterprise can conclude an agreement with a company that provides such services. Outsourcing allows you to concentrate on your core business.