Almost any enterprise that conducts economic activities has administrative costs. They may be absent only if the staff consists of one person or in other similar exotic cases. And so with administrative costs in one way or another, everyone has to meet.
general information
When creating and developing production, it is inevitable to have expenses that are aimed at acquiring a number of certain advantages. Officially, they are called “administrative expenses”. What are they? Administrative expenses - these are the costs that go to meet the management, office and other needs of the company, not related to operational (production) activities. An example is the following:
- Payment to employees not involved in the production or sale of goods and services.
- Communal payments.
- Office rental fee.
Purpose and Purpose
Administrative expenses are used to pay for the needs, the satisfaction of which positively affects the entire company. Of course, far from all expenses can be attributed to them. Consider a small example. In the event that the costs that exist in a particular unit do not give direct or indirect advantages to other departments, they are not administrative.
At the same time, if you maintain an advertising department that will successfully popularize manufactured products, this will lead to an increase in production and will generally have a beneficial effect on the entire enterprise. Thus, the ultimate goal and purpose of any administrative expenses is to provide certain advantages.
What are they like?
Since the topic addressed is very large, a small classification was carried out within its framework. First, let's take administrative and commercial expenses. What are they? This is the name of all expenses carried out with the aim of successfully selling manufactured goods or receiving orders. This is advertising, logistics, sales, storage.
But it is necessary to clearly distinguish nuances. For example, if raw materials are stored, then this is the overhead of production. Costs, in other words. Finished goods storage in warehouses is a component of selling expenses. But that's not all. There are also administrative expenses. They are understood as all expenses related to the life support of the technical and administrative component of the enterprise. Examples include bookkeeping and human resources.
For large structures, such expenses are inevitable, because they are necessary for the normal functioning of the company. And at the same time it cannot be said that they belong to the category of production costs. But at the same time, they are part of a larger association, such as administrative expenses. Without accurate and reliable data collected by the same accounting department, it is very difficult to talk about a real assessment of the situation existing at the enterprise.
Repetition - the mother of learning
It should be remembered: administrative expenses are expenses that go to pay costs that provide the company with priority. The key criterion in this case is utility for the entire enterprise, and not for one department or department. Administrative expenses include management salaries, payment for research activities, office clerks, legal costs, etc. It should be noted that they can take a large number of forms.
So, this may be the payment of bonuses to managers for success, annual reporting meeting, rental of premises, offices, repairs, insurance, depreciation of equipment, utilities, taxes. By administrative and referral to third-party specialists. For example, to auditors, lawyers. This also includes payment for communication services at the enterprise itself. Indeed, without mail, the Internet and telephones, precious time would have been lost.
Three expense groups
Most often, there are expenses called “utility bills”. This is the most common first cost group. Payments are made by almost all enterprises. These include payment for centralized services such as water supply, electricity, heating. You can also include here the communication costs associated with phones and the Internet. The second group includes expenses related to the lease of space: a trading place, a warehouse, an administrative place.
In the case of the presence or absence of any of them, this nuance will affect the activities of the entire enterprise, and assigning expenses to one department or unit can be problematic. The third group includes employees with a fixed income that is not tied to production. These costs are also considered administrative expenses. These employees include accountants or managers serving several areas.
About additional points
It should be noted that there are quite a few expenses that are not administrative expenses. This, for example, sales financing (incentives, organization), promotional events and research of input products. It is also necessary to note the specifics that the accounting of administrative expenses has.
Usually, when accountants process documentation, they don’t allocate many types of expenses. Conventionally, they are divided into ordinary and other expenses. In the first case, they mean expenses that arise due to the nature of the activity and the direction of the organization. Everything else that does not apply to the one considered earlier is entered into the others.
How to keep records?
So, we have the administrative expenses of the enterprise, and they need to be displayed. What do we have to do? Initially, you should decide what we are dealing with. Suppose an enterprise incurs administrative and administrative expenses for servicing a company and financing management. That is, everything that goes to the maintenance of existing assets that are outside the scope of trade and have general economic significance.
An example is rent, a communal apartment, equipment repair, transportation, audit, consultation, security, legal assistance. In this case, they turn to account No. 26 in debit. But in loans, they are accounts No. 02, 05, 10, 23, 25, 60, 68, 69, 70, 71, 76, 94, 97. Why are there so many accounts here? ? And this moment depends on the situation. You don’t need to work with all accounts at once, but some of them will come in handy. How to keep records? You can include costs in the cost of goods or services or display as expenses of the enterprise that arose in the current period.
Working with data
Enterprises that carry out activities in the field of production of goods, the provision of services and the implementation of work use the following method: all expenses for implementation are debited to account No. 90 (sales), which are reflected in No. 26. Consider the situation with production. So, an enterprise can write off something to the 20th, 23rd or 29th accounts. For construction companies, for example, only 20 and 23 are suitable.
And only when the final product is already sold, can it be transferred to the 90th account. For companies engaged in retail trade, you can immediately transfer to the account 90. Saying something specific and at the same time universal for everyone is problematic, since the situations are different. And depending on what the company does, what character it has, and decisions need to be made.In this case, it is necessary not only to worry about the display of expenses, but also to have an idea of future expenses.
After all, if there is no budget, then administrative expenses should be forgotten. There will be no funds for their implementation. For simplicity, estimates of future periods can focus on specific departments of the company. In this case, you must follow the rule of maximum awareness. In this case, the golden mean should be observed. So, the information should be both detailed, and timely, and not costly. To obtain such a result, software is used that is used for data sorting, analysis and control.
Conclusion
That, in general, is all there is to know about administrative expenses. It can be assumed that over time, their maintenance will be simplified and automated. Indeed, now one accountant can replace five or six people at the same job only using well-tuned software like 1 C: "Enterprises", "Sails" or "Galaxy".
As labor productivity grows, its systematization and improvement of accounting rules, employees will need to put less effort, and enterprises spending on software and hardware will more than be compensated for by salaries saved on employees.
