Quite often you can come across the concept of "business expenses", and those who are faced with it for the first time should familiarize themselves with it in more detail. This will be especially useful for future economists and accountants, as well as employees of commercial organizations.
Definition
Selling expenses are expenses that are directed to the shipment and sale of products, as well as packaging services by third-party companies, delivery, loading, etc. This concept is not legally established. Quite often, users are confronted with the expression "business expenses are the costs of the enterprise." It should be understood that this definition is correct, there is legislative confirmation of this.
The Tax Code determines that distribution costs represent sales costs for organizations that specialize in retail, wholesale and wholesale of a variety of goods. Despite the fact that the concept in question is absent in the Tax Code of the Russian Federation, it is encountered in accounting. In this case, selling expenses are line 2210, which is in the income statement.
What do expenses of this category include?
If you consider a list of such costs, you can create a full picture of this term. Selling expenses include the following items:
- Packing services at the warehouse of finished products.
- Transportation.
- The loading and unloading of goods from vehicles.
- Commission fees.
- The cost of rent and maintenance of premises in which goods are stored until the time of sale.
- Salaries of sellers of a company engaged in manufacturing products.
- Representation expenses.
- Marketing expenses.
- Remuneration of workers of trading companies.
- Lease of retail space and storage facilities for the placement of finished products.
- Product insurance.
- Commercial risk insurance.
- Similar costs aimed at the sale of goods.
Having learned that business expenses include, you can understand what they mean for the company and its accounting.
What determines the size of business expenses?
You should consider the main categories of costs and factors affecting their formation:
- Delivery of products. Depends on the distance of transportation, company transportation tariffs, cargo weight, as well as the type of vehicle.
- Loading and unloading. They change due to a decrease or increase in the weight of the product, as well as prices for this service per ton of goods.
- Packaging materials and containers. Their cost is determined by the quantity and price per piece. The first indicator is related to the volume of production and the required materials for packing one unit. Selling expenses of an enterprise of this type relate to those that are undesirable to exclude. This is due to the fact that aesthetically attractive packaging is one of the factors in increasing the demand for goods, so savings in this case are undesirable. The costs of this category will pay off by increasing sales. It can also be said about the study of markets, advertising and other marketing research.
After all commercial expenses have been analyzed, it is necessary to determine ways to reduce them, as well as develop clear recommendations for mastering this procedure.
What are the differences between selling costs in manufacturing and trading companies?
It is worth noting that manufacturing companies relate to this category only those funds that were used in marketing products. Expenses of commercial organizations include everything related to the main activity.
It is worth highlighting the following costs of this type of production organization:
- packing of products and services of copacking;
- transportation of goods to the place of departure;
- amount of commission fees paid by organizations;
- rental of premises for product placement at the point of sale;
- costs for representatives;
- advertising;
- other expenses similar in purpose.
Thus, we can conclude that for manufacturing companies selling costs are means aimed at ensuring the sale of products.
Budget
Budgeting is a modern financial instrument designed by enterprises for the implementation of certain goals. Timely budgeting and adjusting them is an important detail in their formation for the enterprise. At the same time, a business expenses budget is also drawn up. With it, you can determine the company's costs for market research, product advertising and its implementation.
In the process of drawing up the budget, it is necessary to take into account the fact that its amount is taken into account with VAT without depreciation of funds. With regard to business expenses, it is made up by months. If necessary, this budget can be broken down by day. The schedule is required to be drawn up daily.
What features should be considered?
Selling expenses can be divided into conditionally constant and conditionally variable. Depending on market segmentation, they can be grouped by a variety of criteria. Company costs are related to sales volumes. For their appearance and distribution, this will become an economic justification. If the company is engaged in the implementation of a program to reduce sales costs, it should be understood that sales are unlikely to increase, rather, they will even decrease.
Variable costs must be planned depending on the life cycle of the product, expressing them as a percentage of sales. If they occupy a significant role in the enterprise, they must be regularly adjusted, since the system of managing commercial expenses will be changed.
Expenses of commercial banks
They represent the use of funds that are necessary to carry out existing types of banking activities. They are classified according to the method of accounting, period, nature and form of education. Expenses and income of a commercial bank can be divided by a similar method:
- to ensure the functioning of the bank;
- operating and commission costs for operations in financial markets, etc .;
- others.
Moreover, the bank’s income is divided into the following types:
- from banking transactions;
- operating income ;
- others.
A special group in practice includes the costs of a commercial bank aimed at creating a reserve fund. With its help, losses on loans and losses on active operations, as well as on depreciation of securities, are covered.
Conclusion
The information provided allows us to understand what are the selling costs for different types of activities. It is required to adhere to the budgeting algorithm. This will help to avoid incorrect definitions and scheduling. Also, this should be done so that the amount of costs is as accurate as possible and a program can be created to reduce them so that this does not lead to a decrease in profit. The category of commercial costs should be considered in detail in order to exclude the likelihood of errors.