Considering the organization of the work process at any enterprise, it is impossible to disregard such an important moment as distribution costs. What is it and what does this expense item include?
First of all, these are any expenses at the enterprise that are somehow related to the circulation of goods. This includes expenses that are required for the maintenance of the building, remuneration for management and warehouse personnel, transportation costs (delivery and transportation of goods), etc.
The movement of goods requires costs that are associated with its delivery, sale and storage. Such expenses are simply necessary in order to bring the goods to the consumer. Therefore, distribution costs are considered to be the most important and high-quality indicator, which determines the degree of effective work of each trading company.
Of course, the main task of economists is to minimize any costs of the enterprise. Effective management methods are introduced into the workflow and various business plans are developed that can significantly reduce enterprise costs and increase turnover.
Costs of circulation must be considered at all stages of pricing. The cost of production, as a rule, includes sales costs, and the retail price includes wholesale costs.
The internal costs of trading enterprises and organizations that are reimbursed from the profit remaining at the disposal of the organization cannot be considered as distribution costs. Costs of losses from natural disasters and other expenses that are not related to the traditional circulation of goods should also be provided for, such monetary losses do not apply to the item of distribution costs.
Conditionally, distribution costs in trade are divided into two groups: additional and net. The costs associated with the organization of the purchase and sale process, as well as the costs of the maintenance of administrative personnel are net costs. Additional - these are the costs that are required to continue the production process, this may include packaging and packaging of goods, as well as the conversion of production assortment into a commercial one.
We can confidently say that the quality of work of any trade organization determines the level of distribution costs - the quantitative ratio of the amount of expenses to the value of turnover, which is expressed as a percentage. If the work of a trade organization is well planned and organized, then its level of costs will be minimal, and vice versa.
In production, as a rule, there are 2 categories of costs, they similarly classify distribution costs, dividing them into two groups: by economic elements and by cost items.
Such a separation is standard and mandatory for all trading organizations and includes the following elements: deductions for social needs, material costs, depreciation of fixed assets, labor costs and other costs. However, this classification does not allow to fully evaluate and analyze the main costs and costs of production, therefore, it is necessary to conduct a more detailed analysis and accounting for individual items. This makes it possible to identify the most significant costs and determine the structure of the cost item, and also allows you to give an objective assessment of the decisions made by the administrative apparatus.
After analyzing the factors that could affect the value and level of distribution costs, we can determine that they also include the structure and volume of trade, increase and decrease in retail prices, labor productivity, the dynamics of rates and tariffs for services (communication, transport, rent and etc.). Moreover, we can safely say that the company, as a rule, has significant financial reserves that can withstand changes in turnover and a decrease in gross income, which do not pose a threat to the activities and solvency of the company.