In a company's internal operations involving at least one profit center or investment center.

Even when companies create product departments and these departments are profit centers, they rarely combine both sales and production, and the sales department is usually a centralized functional unit. For example, in Matsushita, the electrical engineering plant is a product department and profit center, but it sells products to a wholesaler at the market price. The grocery store has a sales department. It's normal

The structure of the Matsushita corporation is based on a system of branches, considered as profit centers. The created structure is based on the following idea. Man's ability to manage has certain limits. Therefore, the optimal size of the enterprise must be found, allowing it to be managed efficiently. But in a decentralized system (think of associations and enterprises in our industry), the president of the corporation must somehow control the activities of branch managers. This is what the planning and control system under consideration is for. Moreover, attention should be paid to the fact that in domestic theory and practice, the emphasis is usually placed on planning. And in Japanese corporations, control is viewed as a more active activity that allows you to reliably ensure the effective operation of the company, as an activity that is methodically closely linked at all levels of management by top managers, branch managers, and department managers.

The accounting staff of Matsushita is about 1.5 thousand people. Of these, 100 people work in the central accounting department, the rest - in the branches, which are profit centers.

In the previous two chapters, the discussion has been in the context of cost centers and profit centers. Here we introduce a new concept of the center of investment - the divisions of the organization, in which the streams of income, costs and capital investments can be traced. Structures with investment centers are often called segmented. It should be noted that investment centers can be both divisions of one company (or segments) and individual firms within an industrial and financial group, and in public sector organizations they are sometimes called strategic or service units. Strategic units (SU), in addition to coordinating the flow of costs, revenues and capital investments, form their own strategy, often practically independent of the central bodies of the organization.

However, in order to survive in the competition, it is not enough for an enterprise to manage costs, it must make a profit, and profit is not the goal of cost and revenue center managers. Therefore, in the management control systems of enterprises in countries with developed market economies, profit and investment centers are most often found.

A profit center is a segment whose manager is responsible for both the revenue and the costs of their unit.

The purpose of the profit center is to obtain maximum profit through the optimal combination of parameters of input resources, output volume and price. Profit center managers, unlike cost center managers, are not interested in reducing product quality, as this will reduce their income, and hence profit - an indicator by which their performance is evaluated.

However, in practice there are cases when the interests of two or more profit centers collide.

EXAMPLE. The university provides paid educational services, in particular for higher education, and has a number of branches in different cities of Russia. The enrollment of students is carried out for training in various specialties. Faculties in this case can be considered as profit centers, the revenue part of which depends on the quantity

Profit center managers, as in the previous cases, may be responsible for achieving certain non-financial results, such as market share, customer satisfaction, and others.

For all their advantages, profit centers are not interested in the prudent use of the investments allocated to them. Investment centers do not have this shortcoming.

As already noted, in the conditions of an underdeveloped market economy, Russian organizations are mainly represented by cost or income centers, at best - profit centers, investment centers are extremely rare. A wealth of experience in the field of organizing the functioning, accounting and evaluation of the activities of these responsibility centers has been accumulated by Western s / wounds (see section II).

These data can also be presented in another form (see Table 4). Table 4. The third version of reporting by profit centers, thousand rubles.

It follows from the calculations that the segment operating in Ukraine is unprofitable. The ranking of profit centers in this case is as follows Belarus>RF>Ukraine (the segment is unprofitable).

Thus, when compiling segment reporting by profit centers, the most successful indicator for the distribution of fixed general business costs between responsibility centers (operating expenses) should be recognized as segment profit. This method does not distort the real picture of the efficiency of the responsibility centers.

If the administration chooses a management control system based on profit and investment centers, then it will then have to decide on what basis it should create structural divisions according to the types of products they produce for the geographical regions they serve, groups of buyers When choosing an organizational structure, it should be considered whether such division to facilitate the process of assessing the activities of structural units. This, in turn, depends on the amount of total cost associated with each alternative structure. After all, the costs associated with the construction of a particular management structure should pay off. If each holding company works for a certain region and produces different products, then it would be more reasonable to segment by different regions than by product types. If each enterprise of the holding produces a certain product and supplies it to different regions, then the division by type of product will be more reasonable.

As noted above, in the centers of profit (investment), managers independently resolve most production and financial issues without any intervention from the company's management. Their activities are evaluated solely by the results achieved. Such autonomy requires the management of the organization to have an individual approach to resolving the issue of evaluating the effectiveness of the activities of a particular structural unit.

In the practice of countries with market economies, four indicators of a financial nature are most often used to assess the activities of responsibility centers: income, return on investment, residual income and economic value added. These indicators are not suitable for reflecting

Cost Center- This is a responsibility center, the head of which controls costs, but does not control profits and other economic indicators.

A cost center can coincide with an organizational unit (workshop) or be part of it as a department (site). Some business units may have two or more cost centers. The basis for the allocation of cost centers is the unity of the equipment used, the operations or functions performed. The accounting system in the cost center is aimed only at measuring and fixing the costs at the entrance to the responsibility center. The results of the responsibility center (the volume of products produced, services rendered, work performed) are not taken into account, especially since in many cases it is either impossible to measure them, or there is no need for it.

In other words, cost center is a structural unit , in which you can organize rationing, planning and cost accounting in order to monitor, control and manage the costs of production resources, as well as evaluate their use. The center manager is responsible for the level of costs.

Many organizations make the mistake of judging a cost center solely on its ability to control and reduce costs. For example, the head of the procurement department, who is responsible for the selection of suppliers and the price of materials, is also responsible for their quality. Managers are doing the right thing by evaluating the performance of the cost center by its contribution to the success of the organization (timely fulfillment of contracts, compliance with company ethical and economic obligations, employee safety).

When defining cost center tasks the following must be taken into account:

1. each center should be the responsibility of a foreman or department head who will assist the management of the organization in planning and cost control;

2. each center should combine machines and jobs, the costs of which are of a homogeneous nature. This makes it easier to determine the factors that affect the cost of a given center and the choice of the basis for the distribution of costs by cost carriers. Since the main factor determining the amount of costs at production sites is capacity utilization, it is most often chosen as the basis for distributing costs in centers. At the same time, at each production site, the loading of production capacities should be as homogeneous as possible, which requires a deeper division of the organization into cost centers;

3. All costs should be easily charged to cost centers. With the deepening of the organization's division into cost centers, the share of costs that are common to several cost centers increases, which necessitates their distribution.

Revenue Center is a responsibility center, the manager of which is responsible for generating revenues, but not for costs. The activities of the heads of such departments in the cost management system are evaluated on the basis of the revenue received or the amount of internal income, so the task of accounting in this case will be to record the results of the activity of the responsibility center at the output. This does not mean that the divisions do not have expenses, but the costs of maintaining them are not commensurate with the amount of income that they control. The revenue center is usually formed in the sales divisions responsible for sales revenues for their divisions or even market areas.

Revenue center managers, as well as cost centers, may be responsible for achieving non-financial goals, such as ensuring competition in those markets where the firm has a first or second sales position. Some revenue centers control prices, product mix, and promotional activities.

Since the performance of an organization can only be measured by profit, which is not the goal of cost and revenue center managers, profit and investment centers are often found in organizations' cost management systems.

profit center is a department whose head is responsible for the income and expenses of his department. The profit center manager decides on the amount of resources consumed and the amount of expected revenue. The criterion for evaluating the activities of such a center is the amount of profit received. Therefore, accounting should provide information about the cost of costs at the entrance to the responsibility center, about the costs within it, as well as about the final results of the unit's activities at the exit. The profit of the responsibility center in the cost management system can be calculated in different ways. Sometimes only direct costs are included in the calculations, in other cases indirect costs are included (in whole or in part).

A profit center operates similarly to a stand-alone business. The difference is that the level of investment in a responsibility center is controlled by the management of the organizations, not by the manager of the center. For example, if the head of the mechanization section, which is part of the company, has the authority to make decisions on the prices for the services provided to him, the promotion of these services, the choice of suppliers of spare parts, fuel, oil, tires, etc., then this section can be assessed as a profit center .

Revenue and profit centers differ as part and whole. Profit center managers (unlike cost center managers) are not interested in reducing the quality of products, as this will reduce their income, and hence the profit by which their effectiveness is measured. The purpose of this center is to obtain maximum profit through the optimal combination of the elements that determine it: sales volume, sales prices, variable and fixed costs.

Profit center managers, as in previous cases, may be responsible for achieving certain non-financial results (satisfying consumer needs, etc.). Controlled revenues are not limited to sales revenue, they cover all incoming revenue.

The structure of profit centers is more complex than income centers. Profit centers consist of several cost responsibility centers and one or more revenue centers. They are formed in separate structural units that do not have the status of a legal entity, but have a production cycle and a cycle for selling products or a cycle for purchasing and selling goods with the right to set purchase and sale prices in a certain range.

Capital investment (investment) centers- subdivisions of organizations in the investment sphere, whose managers control not only the costs and incomes of their departments, but also the efficiency of the use of funds invested in them. An investment center can be compared to an independent business, as a rule, it stands out in organizations with a high degree of decentralization.

The heads of investment centers (capital investments) have the greatest authority in the management: they are delegated the right to make investment decisions, that is, to distribute the allocated funds for projects. These centers work with a capital budget or projected cost plan for the acquisition of long-term assets and funds to finance these acquisitions.

(profit centre) A division of a company whose performance is measured by its earnings.

Source: Business. Oxford explanatory dictionary

PROFIT CENTER

profit centre) a division of the company that keeps records of its income and expenses and whose activities are evaluated by the management of the company according to the profit it receives.

Profit Center Budgeting: Planning and Accounting

Source: Foreign Economic Explanatory Dictionary

Profit Center

Responsibility center, the financial results of which are determined through profit (the difference between its income and expenses / costs). Wed with the Expense Center.

Source: Glossary of management accounting terms

profit center

Structural unit (responsibility center), the head of which is responsible for receiving income and incurring expenses.

The profit center affects both the revenues and costs of an organization. An example is a branch of an organization that manufactures and markets products.

Source: Dictionary: accounting, taxes, business law

PROFIT CENTER

usually all divisions, one way or another tied to the line of the “commodity orientation” structure, capable of independently making a profit, regardless of the success of other parts of the enterprise, moreover, the amount of profit is set based on those elements of marketing that the corresponding division is really capable of managing.

Source: Big Accounting Dictionary

profit center(profit centre) - a structural unit of an enterprise that has a direct impact on the volume of product sales, the amount of income, costs, profits and other performance indicators of production and financial activities.

Profit center - a company or division of a company; the center of financial responsibility, responsible for generating profits, and having the necessary resources and powers that affect the increase in income and decrease in expenses within its unit.

Profit center (profit center) is a structural subdivision (or group of subdivisions) that carries out a certain set of core activities and is able to have a direct impact on the income and expenses of this activity. An example of a profit center can be any, in a certain sense, independent division within the company, engaged in a certain line of activity, supporting almost the entire cycle from the purchase of raw materials (in the case of a manufacturing enterprise) or goods (in the case of a trading company) to the sale of finished products.

Naturally, profit centers may not be independent in the full sense of the word; the central directorate (or headquarters) of the company may impose certain restrictions on business profit centers. In addition, profit centers can use certain services of the central directorate, for example, in terms of preparing management reports, legal and technical support, etc.

It is much easier to set targets, evaluation criteria and a motivation system for profit centers than for cost centers, because. by profit centers, you can clearly calculate the financial result (profit), because. this type of financial responsibility center is directly responsible for both expenditure and revenue. But there is one nuance associated with overhead costs. If the financial result of the profit center is considered only by direct costs, then there really are no problems, and if a decision is made to allocate overhead costs, then difficulties may arise. True, the last remark may apply not only to profit centers. After all, if a company comes to the conclusion that it is necessary to allocate overhead costs to financial responsibility centers, then this problem will affect not only profit centers, but also other financial responsibility centers.

Profit center - a structural unit (or the company as a whole) responsible for the financial result from current activities. In most cases, the responsibility for the current profit (or loss) lies with the management of the company. In some cases, profit centers responsible for the financial result for any type of activity may be allocated within the company. A profit center may contain lower income centers and cost centers. The tool of budgetary management for this type of financial responsibility center (not counting the budgets of sales, purchases, costs) is the Budget of income and expenses.

A profit center is a department whose manager is responsible for the income and expenses of his department. The profit center manager decides on the amount of resources consumed and the amount of expected revenue. The criterion for evaluating the activities of such a center is the amount of profit received. Therefore, accounting should provide information about the cost of costs at the entrance to the responsibility center, about the costs within it, as well as about the final results of the unit's activities at the exit.

1.2.2 RESPONSIBILITY CENTERS

The profit of the responsibility center in the cost management system can be calculated in different ways. Sometimes only direct costs are included in the calculations, in other cases indirect costs are included (in whole or in part).

A profit center operates similarly to a stand-alone business. The difference lies in the fact that the level of investment in the responsibility center is controlled by the management of construction organizations, and not by the center manager. For example, if the head of the mechanization section has the authority to make decisions on the prices for the services provided, the promotion of these services, the choice of suppliers of spare parts, fuel, oil, tires, etc., then this section can be assessed as a profit center.

Revenue and profit centers differ as part and whole. Profit center managers (unlike cost center managers) are not interested in reducing the quality of products, as this will reduce their income, and hence the profit by which their effectiveness is measured. The purpose of this center is to obtain maximum profit through the optimal combination of the elements that determine it: sales volume, sales prices, variable and fixed costs.

Profit center managers may be responsible for achieving certain non-financial results (customer satisfaction, etc.). Controlled revenues are not limited to sales revenue, they cover all incoming revenue.

The structure of profit centers is more complex than income centers. Profit centers consist of several cost responsibility centers and one or more revenue centers. They are formed in separate structural units that do not have the status of a legal entity, but have a production cycle and a cycle for the sale of construction products or a cycle for the purchase and sale of goods with the right to set purchase and sale prices in a certain range.

The production process of the company (element two)

The figure reflects those functions (and divisions (some divisions in the structure of the company (department, department, center, etc.) may not exist, but their functions in the company are performed by existing divisions or employees)) of the productive process, which can be called profit centers , which refers to units directly involved in the production of profits. Each of them and all together they affect the level of profitability of the company (economic analysis of the company's activities will be reduced to the allocation of such profit centers, understanding the activities of each of them to find specific ways to maximize profits).

Financial Structure and Financial Responsibility Centers

However, in addition to profit centers, within the framework of the company's production process, there are also cost centers (economic analysis also comes down to understanding the functioning of such centers. The purpose of understanding is to find specific ways to reduce costs in each center. Cost reduction has a positive effect on the level of profitability of the company).

The functions of cost centers are recruitment (human resources department), accounting for actual expenses and income, identifying profits, settlements with employees and partners, as well as government agencies (accounting), transport (corresponding department, garage), security, maintaining cleanliness, serviceability of communications etc. (administrative and economic divisions).

In some firms, as needed, a new function is introduced: public relations (public relations department). The main task of this function is to create an attractive image of the company in the view of the surrounding people (who are not employees of the company). To achieve this goal, the firm develops special campaigns, programs or plans.

Cost centers include departments (and therefore functions) that carry out research and development (R&D), for example, the department for the development of a new product.

Schematically, this part of the firm's production process may look like the one shown in the figure.

The productive process of the firm (element three)

The overall scheme of the productive process within the firm looks quite impressive (see the figure below).

The productive process of the company (holistic view)

In practice, depending on the size of the firm, its profile and other conditions, the scheme may be more complex.

At the same time, all the designated functions (in one volume or another) are performed (should be performed) in any firm, regardless of its size.

PROFIT CENTER

Born in the city of Kostroma. In 1993 she graduated from the Ryazan Radio Engineering Institute with a degree in Computer-Aided Design Systems.

In 2012 she graduated from the State Educational Institution of Higher Professional Education “Ryazan State University named after S.A. Yesenin" with a degree in "State and municipal management". ,

From 1994 to 2003 worked in small enterprises in Ryazan

From 2003 to 2008 worked at JSC "Mobile TeleSystems"

In 2008, she was appointed to the position of Deputy Head of the Roskomnadzor Office for the Ryazan Region.

In 2016, she was appointed to the position of Deputy Head of the Roskomnadzor Office for the Central Federal District.

Budgeting centers, responsibility centers and their types (cost centers, revenue centers, profit centers, investment centers)

Budgeting Center (CB) is a structural subdivision or a group of subdivisions that carry out a certain set of business operations that can have a direct impact on income or expenses from these operations and are responsible for the implementation of the goals set for them, compliance with spending levels within established limits and achieving a certain financial results of their activities.

The allocation of budgeting centers is possible by responsibility centers:

Income center - the Central Bank, whose head within the allocated budget is responsible for maximizing sales income, does not have the authority to vary prices and is limited in spending funds (within the budget).

Cost center -- the Central Bank, the head of which is responsible for the performance of its functions within the established expenditure budget. As a rule, these are divisions that provide support and maintenance for the functioning of the company and do not directly generate profit. Sometimes marginal income centers are also distinguished - financial responsibility centers, whose leaders are responsible for marginal income in their line of business (usually a separate business or a separate product).

The center of profit is the Central Bank, whose head is aimed at maximizing the rate of profit and for this purpose can vary the selling prices and costs. As a rule, the profit center is the company as a whole.

Investment Center - Central Bank, the results of the activities of the head of which are evaluated on the basis of indicators of the efficiency of the use of assets.

Sometimes so-called venture centers are singled out - divisions that introduce new types of business and have not reached self-sufficiency. They are organized on the basis of a secure business plan for a new line of business.

Central banks can be formed: 1. from one subdivision; 2. by combining several departments, when it is not economically feasible to project the costs of each department separately. At the same time, the head of the Central Bank is responsible for the results of the activities of all departments of this center; 3. by separating several securities from one subdivision.

In addition to the composition and structure, an integral element of the financial structure of the Central Bank are the mechanisms of their interaction, which include: transfer prices, corporate taxes, domestic lending, general investment, conflict resolution (arbitration). The choice of mechanisms for interaction between the Central Bank is determined by the company's development strategy and depends on factors such as the nature of the relationship between the Central Bank

A responsibility center is a segment of an organization in which costs, expenses, or revenues are accounted for and controlled. The Responsibility Center as part of the management system has an input and an output. The input is raw materials, materials, labor costs. The output is finished products, works and services. The purpose of accounting by responsibility center is to summarize data on costs, revenues and expenses for each structural unit (i.e. department, workshop, etc.)

The presence of responsibility centers depends on the forms of organization of management: 1. a linear form of management along the vertical; direct subordination of lower levels of management to higher ones.2. the functional form is management by functions, departments, sections (finance, accounting, personnel department).3. linear-functional form.

Classification of responsibility centers: the scope of authority and responsibility - the center of responsibility, based on the scope of authority and responsibility, is divided into: 1 cost center, 2. income, 3. profit, 4. investment.

A cost center is a part of an organization in which information about costs is generated (workshop, production site). In such a center, planning, standardization and cost accounting are organized for the purposes of control, analysis and management. The cost center is divided into: 1 regulated cost center 2. wired cost center. For the center of regulated costs, the optimal ratio between the sale of products is established. The cost control center is managed with the help of budgets. For an arbitrary cost center, there is no optimal ratio between costs and income (repair shop, laboratories).

The income center is a segment of the organization in which information on sales, revenue is generated (sales department, store, warehouse). The main coefficients of this center are the proceeds from the sale of products, sales volume and prices. The center is managed with the help of the profit and loss budget, which are formed on the basis of the report.

The profit center is a segment of the organization in which income, expenses, profit are taken into account and planned. The main indicator of the center is the profit of the organization. The profit center manager controls prices, sales volume, income and expenses. Profit center management is carried out through the profit budget, through the profit and loss budget, as well as income and expense budgets (administration, accounting, financial department).

An investment center is a segment of an organization in which information about financial investments, investment capitals is formed. The management of this center is responsible for profit, investment efficiency.

Based on the functions, the responsibility center is divided into: basic and other. The main centers are engaged in the production of products (the main activity) Other centers serve the main centers (repair shop, QCD)

The figure reflects those functions (and divisions (some divisions in the structure of the company (department, department, center, etc.) may not exist, but their functions in the company are performed by existing divisions or employees)) of the production process, which can be called centers profits, which are understood as units directly involved in the production of profits. Each of them and all together they affect the level of profitability of the company (the economic analysis of the company's activities will be reduced to the allocation of such profit centers, understanding the activities of each of them to find specific ways to maximize profits). However, in addition to profit centers, within the framework of the company's production process, there are also cost centers (economic analysis also comes down to understanding the functioning of such centers. The purpose of understanding is to find specific ways to reduce costs in each center. Cost reduction has a positive effect on the level of profitability of the company).

The functions of cost centers are recruitment (human resources department), accounting for actual expenses and income, identifying profits, settlements with employees and partners, as well as government agencies (accounting), transport (corresponding department, garage), security, maintaining cleanliness, serviceability of communications etc. (administrative and economic divisions).

In some firms, as needed, a new function is introduced: public relations (public relations department). The main task of this function is to create an attractive image of the company in the view of the surrounding people (who are not employees of the company). To achieve this goal, the firm develops special campaigns, programs or plans.

Cost centers include departments (and therefore functions) that carry out research and development (R&D), for example, the department for the development of a new product.

Schematically, this part of the firm's production process may look like the one shown in the figure.

The overall scheme of the productive process within the firm looks quite impressive (see the figure below).

The productive process of the company (holistic view)

In practice, depending on the size of the firm, its profile and other conditions, the scheme may be more complex.

At the same time, all the designated functions (in one volume or another) are performed (should be performed) in any firm, regardless of its size.