Losses - what is it? What are they? When do they occur? How can they be fought, minimized and eliminated?
general information
Let's start with the definition. Losses are losses expressed in cash, which entailed an increase in expenses and their excess over income (or a decrease in the profit of an enterprise with the same result). They arise during production and / or sale, when the level of costs exceeds the selling price of manufactured products, works, services, etc. due to various reasons.
As such, fines, penalties, forfeits, cancellation of bad debts, uncompensated losses from natural disasters, from the loss of material values above the normal norm, when the culprits, arbitration fees, legal costs, etc. At the end of the year, the results are summed up and it is determined what is available on the dry balance - profit or loss. This allows us to draw conclusions about the correctness of the adopted work strategy and determine future plans.
What is the loss in terms of legislation?
Loss of an enterprise is an aspect well defined by various laws and regulations. Most attention is paid to him in the Civil Code of the Russian Federation. Of greatest interest in this case is article 15, 330 and 331 of the Civil Code. What is it talking about? The most general and complete loss is considered in article 15. There it is given its definition and various variations.
Thus, when considering legislation, one can note a deliberate violation of expenses, non-receipt of income, lost profits, and the possibility of claiming compensation. The penalty is paid to article 330 of the Civil Code of the Russian Federation. And the loss of a deposit is already Art. 331 of the Civil Code of the Russian Federation. It should be noted that this is not a complete list of articles where there is a mention of losses. But all other cases - as a rule, in the event of a rather specific situation.
And what about compensation?
In the legislation for such cases the phrase “compensation for losses” is used. This means that losses can be compensated in cases where it is provided for by the Civil Code, regulatory documents and the contract (if it does not contradict the first two). Therefore, you can count on the fact that at least something will come back. But you must understand that this is only for certain cases.
Let's look at some small examples. There is an entrepreneur. He made a certain amount of production, but if he cannot sell it, then he will have significant losses. This, of course, is bad, but no one will compensate them. And let's say people bought home insurance from landslides. A natural disaster happened and the house was destroyed. Well, in this case, the insurance company guarantees compensation for losses. This will allow you to buy or build a new home and provide it with all the necessary equipment.
What is it called?
Let's continue to consider the two previous examples. When an entrepreneur cannot sell his products, he has an uncovered loss. This does not provide compensation due to the fact that he knew what he was going to and that he was taking risks that could lead to failure. Due to the inability to predict success, an enterprise may expect failure, and the dependence of the final result on a large number of different factors leads to the fact that no compensation can be provided. Indeed, in this case, a wide field of abuse opens up.
Whereas in the case of real estate, you can assess the chances that in the near future it will suffer. So, let’s say, in a certain area, every twenty houses in a decade are destroyed by landslides. In this case, you can take and offer insurance coverage worth 1/10 of the price of the house. Of course, this is a very crude example, but now it’s clear how this mechanism works.
Economic aspect
When do losses occur? The prerequisites for them are a number of factors, describing which you can write more than one book. But since the size of the article is limited, we will consider the most common causes.
Initially, it should be mentioned that many entrepreneurs produce products that are not in demand with the existing ratio of price and quality. It may be such that it will not be requested at all. Therefore, before embarking on the implementation of a specific project, you should still take care to analyze the potential sales market and develop at least an approximate plan of activity.
After that, the list of the most popular reasons includes deliberate sabotage offenses committed by third parties. These may include employees of the enterprise (accidentally or intentionally), competitors or responsible persons (controllers, government officials and other people). True, in this case, you can still count on a certain compensation. But its receipt is fraught with significant costs.
Conclusion
Profit, loss - these are natural moments of doing business. In order not to be mistaken with the assessment of the existing situation, it is necessary to conduct detailed accounting. Accurate knowledge of the situation at the enterprise will allow you to make the necessary decisions. So, if too many products have accumulated in the warehouse, then some of the capacities can be stopped. If orders do not have time to be completed, you should think about optimization and expansion.