Over the long period of existence and development of economic theory, theories have been created and tested in which the most diverse sources of profit are justified and in accordance with which the accounting policy of the enterprise is built. As a rule, it is customary to classify these theories into objective ones, in which this policy is considered as a derivative of the sources of profit mediated by competitive equilibrium, and subjective, where the accounting policy is formed under the influence of the way of making profit, formed thanks to the businessman’s entrepreneurial talent. The founders of the theories of the first group were A. Smith, K. Marx, J. S. Mill and other supporters of the classical theory of profit. They explained the possibility of making a profit solely as an external independent phenomenon, due to imbalances arising from competition.
Accounting policies, enterprises or institutions, carried out on the basis of understanding the source of profit as a result of the manifestation of the entrepreneur’s personal qualities, was substantiated, first of all, in the works of J.-B. Seiya and J.A. Schumpeter.
The problem of achieving the best results of the financial activities of the company is the main one for any commercial institution, and the accounting policy of the enterprise, contributing to the receipt of such a result, captures in monetary form the result of all business activities.
Accounting for the financial results of the enterprise, as the term of the entire financial result, fixes an increase or decrease in the value of fixed assets of the enterprise, capital, which is formed for any period in the process of functioning of the business.
The accounting policy of the enterprise reflects the processes of dynamics of business profitability, the degree to which it has achieved its goals, the nature and effectiveness of innovation.
As a rule, in accounting, accounting for the financial results of an enterprise in the aggregate of all indicators, including cash accounting, is based on the calculation of expenses and income and their information in a single report for a certain period of economic activity. The key indicators of financial results here are the profit of the enterprise or company and loss.
Loss is understood as financial losses, a reduction in all material and financial resources that arise when expenditure indicators exceed revenues. Profit is understood as an indicator reflecting the excess of the company's revenues on expenses. The sources of such excess can serve as the successful implementation of the goods or services produced, competent marketing policy, and especially market conditions. At the same time, making a profit is the main financial result for any business, which is why accounting at the enterprise is organized. Ultimately, profit characterizes profitability, which in turn determines the effectiveness of business activities in general.
In practice, several fairly effective strategies are used to significantly improve the financial results of the company. These strategies have proved particularly effective in industries where the company’s work is aimed at the end user, that is, where the production of goods and services are the most important indicators.
These strategies are:
- Reducing the cost of production by reducing production costs;
- Introduction of innovations and advanced technologies in production;
- Improving the quality of the manufactured assortment and its optimization;
- Improving and optimizing the production and non-production structure of the company;
- Active marketing policy and use of additional sources for profit;
- Optimization, automation and application of modern technologies in the field of accounting.
Due to the fact that in a market economy business performance is reflected in financial results, accounting for cash in the enterprise is the basis for the effective functioning of the enterprise in the market.