When talking about an enterprise, they use the concept of "costs." This term refers to different expenses of the organization. Costs are the cost of resources used by the enterprise. In other words, the basis of expenses is the application of everything that makes up the assets of the company.
Enterprise resources and their types
The company uses various means to achieve its goals, satisfy its needs and the needs of third parties. Types of resources include intangible assets, fixed assets, stocks of goods, raw materials, materials, work in progress, receivables, financial assets and others. Simply put, all these funds are represented in the assets of the company.
Types of enterprise resources are divided into financial and production.
The former include money, securities, a share in the authorized capital of other organizations, financial investments, etc.
The peculiarity of these tools is that they cannot be used directly inside production. Moreover, financial resources cannot be created within the enterprise. Their formation and application occurs subject to the interaction of the organization with the external environment.
Production facilities are those types of resources that are used or created (in the process or as a result of production) directly within the organization. These means, in particular, include finished products, internal production services and work, materials and so on.
If we talk about the successful activities of the company as a whole, then both financial and production types of resources are of importance.
If more attention is paid to profitability, then production facilities come first. They have their own classification. In particular, production types of resources can be used and output.
The tools used are used within the organization and do not go beyond it. These include fixed assets, materials, labor, work and services within production.
The output assets include finished products, work in progress, services and work carried out "on the side." In other words, these funds are implemented in the external environment, go beyond the organization.
It should be noted that the same assets of the enterprise can relate to both weekends and used funds.
The resources used, in turn, are divided into secondary and primary.
The latter include funds received by the company from the external environment. These include the work and services of third parties, fuel, labor, materials, raw materials and more.
Secondary funds are formed within production. They mainly include the main assets formed by the company’s own forces, internal production work, etc.
The organization is a continuous cycle of resources. So, financial resources go into production and vice versa. Specialists illustrate the transformation of funds and their movement, the organization’s relationship with third-party entities using the "transformational" (transitional) process.
In the supply market, the transfer of financial resources to production is carried out. For example, material is purchased for money.
Inside the company, the transformation of primary resources into secondary is carried out. For example, the acquired material is transformed into a part, which is subsequently used to create a product (output means).
On the sales market, the transition of the output resource to financial assets is carried out. For example, products are sold with a certain delay in payment and are transformed into a financial instrument - accounts receivable.