In this article you will learn what the operating costs (abbr. OPEX) and with which they are associated.This term is often used in corporate finance, and usually refers to those expenses that arise periodically in the conduct of business.
Operating expenses - these are expenses that are associated with the management of the company and its activity in sales of goods and products;is the cost of doing any business that includes any cost associated with the direct operation of the company.They systematize reporting period expenses not related to the direct production of goods.PSBU "costs" streamline operations group expenditures of an entity for some economic elements:
- labor costs;
- depreciation - the difference arising when assets such as production equipment or vehicles gradually wear out, so that their market value is somewhat lower than the original (this article will refer to the operating costs, if such assets are used in his businessoperating activities);
- allocations of funds for the implementation of social measures;
- labor costs of employees - the most common operating expenses, in some cases, it takes the greatest weight in the total expenditures of the enterprise;
- other operating expenses - is a marketing, advertising, payment of licenses and legal services, office supplies, utilities, expenses for the purchase of necessary raw materials, the cost of research and scientific activities.
It is worth noting that in addition there are operational and capital expenditures (abbr. CAPEX).They are, for example, may include the cost of one-time purchase of new equipment when the old is completely worn out, that is amortized.
Why are divided capital and operating costs?This is due to the fact that all investors and company management should get a more accurate picture of where it spent the funds before the profits were obtained.For example, the operating expenses of the bank - it is wages, purchase of office supplies, and capital - the purchase of premises.
analytical account of the costs of operating any institution or enterprise organized, given the nature of the activities carried out by particular works and services.Sophisticated analytical account of the formation is essential to define the methodology of analysis of their effect, as well as to objectively reflect the financial results (losses or net profit) organization.
in all sectors of the economy operating expenses allocated to economic elements.These indicators have recently played an increasingly important role in the work of organizations in the face of fierce competition not only from other countries but also with domestic manufacturers.
Firstly, the modern market requires an effective and appropriate management of the organization.To be successful, business leaders need to hire management staff with high qualifications.This requires a careful control of the use of funds and a careful analysis of the effectiveness of their use.
Second, the successful promotion of goods and services on the market requires significant investment in enterprise sales.Due to the highly competitive producers have to carry out serious and expensive market research, spend considerable funds on advertising and to process the goods before the sale.
Thirdly, innovation (ie innovation) the nature of today's businesses require the ability to get used to the new conditions, steadily working in the sphere of circulation.
how to get information about operating costs?
most popular way to obtain data on the state of operating expenses - is accounting management or the use of special software for financial management.After all, if the value of the expenditures from year to year changes (especially in the direction of their increase), the interests of the parties (creditors and shareholders) will want an explanation from management.Having this information will help determine the causes of changes in spending that in the future will eliminate the problem of rising costs.
