Let us raise the topic of management accounting in such a specific and rather rarely covered area in this vein as agriculture. A lot has been accumulated about the state of affairs in this area of data, but it is difficult to call them encouraging. So what exactly is it all about? What is customary to mean by this term?
Under management accounting understand the system of collection and submission of information, on the basis of which decisions are made regarding the activities of an organization. Thanks to management accounting systems, it is possible to understand the state of affairs - the state of the enterprise, rational or not-so-very distribution of available resources. The ultimate goal of such a system is to increase the efficiency of any production activity.
The main objectives of accounting
As in other areas, the main purpose of management accounting at an agricultural enterprise is to provide managers and supervisors with the information necessary for competent decision making and successful company management. Its main tasks include:
- Drawing up a production plan and budget.
- Calculation of costs and determination of control measures through operational accounting.
- Analysis of the data and development of decisions based on the reports received.
Accounting in agricultural organizations. What are the features?
The management accounting system at agricultural enterprises implies the achievement of the optimal combination of quality and quantity of products issued. The level of economic efficiency characteristic of agriculture is determined, firstly, by the indicated ratio (cost-results), which directly depends on the degree of efficiency of use of all production resources. Secondly, from the controllability of those processes that are characteristic of them.
To build a management system for an agricultural organization should be based on costs as the main motivating factor. The system of their optimal distribution is obliged to supply the necessary information with the necessary degree of detail, to facilitate the identification and implementation of those areas of activity that can be considered highly profitable. It is such a policy that can increase efficiency in this area.
About reforms in the agricultural sector
Over the course of several decades, our country has been undergoing certain reforms, the purpose of which is to give maximum opportunities for the development of agriculture. The goals and objectives of such transformations are fully disclosed by the Government Decree of the Russian Federation No. 717, issued in July 2012. It lists the main tasks assigned to the adopted for the period 2013-2020. the program.
What is this serious document about? Priority is given to the optimal organization of agricultural land, stimulating the growth of food production and all major types of agricultural products, preventing the spread of diseases in animals by financing appropriate measures, and supporting the infrastructure of the agricultural market. According to the decree, sales markets must be regulated with greater efficiency, and the so-called small business forms of agricultural organizations should be strengthened and supported.
Attention should be paid to more effective interaction of state control bodies with the agricultural sector. The main task for this period is a gradual increase in the profitability of this important industry, an increase in the quality of life of rural residents and the creation of conditions under which innovative developments and decent technical support for agricultural enterprises are possible.
About finance
For these years, a substantial amount of money will be allocated to the federal budget for the implementation of the program. According to expectations, financial injections are predicted to bring a number of important changes in the development of the industry. But it should be remembered that the main condition is the targeted and as rational use of the allocated funds as possible.
We should not forget that with changes in the structure of world agriculture that appeared after the introduction of sanctions by our country on the import of certain types of products, a sharp increase in the efficiency of this sector and a thoughtful organization of agricultural products produced by domestic suppliers are required.
Successfully operating agricultural enterprises should increase labor productivity, achieve a higher level of crop cultivation efficiency, ensure uninterrupted procurement of the required amount of agricultural products in the country's volumes to eliminate its shortage. Particular attention should be paid to the effective use of cash assets - land, arable land, farms, gardens, livestock, transport, etc.
What's important?
The agricultural sector requires the involvement of young and competent specialist managers, new innovative programs and developments at each of the production sites. Organization of an agricultural enterprise requires a clear distribution of measures of responsibility. Sources of financing, both own and subsidized, should be used with maximum efficiency.
To successfully achieve these goals, each economic entity in the field of agricultural production must have a well-functioning internal management system. Without it, it is impossible to establish effective production activities, to identify the necessary internal reserves.
Where is the system?
The main difficulty inherent in the sphere of managing agricultural enterprises is the lack of complete and reliable information, without which thoughtful management decisions are impossible. A system of uniform methodological recommendations, according to which it is possible to organize accounting and management in individual sectors of the economy, is currently lacking. Because of this, many enterprises are content with incomes much lower than possible, unplanned expenses increase, reliable data on production costs are lost.
These factors negatively affect the profitability of all agricultural sectors. Unfortunately, the agro-industrial complex of our country has not yet been united by a specialized information management system, thanks to which it would be possible to optimize the activities of agricultural enterprises.
About accounting value
In the light of the foregoing, management accounting acts as the main tool, thanks to which it is possible to obtain all the necessary data for making a balanced economic decision. Its presence at the enterprise leads to the formation of a unified information system and ensures the efficiency and timeliness of decisions made by management and, as a result, the successful development of an agricultural organization.
On the basis of accounting, information databases are created that are different from accounting, but without which important decisions are impossible. This system also allows monitoring at the most relevant sectors of the economy and promotes the development of a corporate spirit among employees.
Why is it not moving?
As already mentioned, unfortunately, while a single management accounting system for the entire sector of this industry does not exist. Activities for its implementation are more likely to be isolated cases. The reason for this is the many difficulties and features inherent in activities in this particular industry, and the traditionally conservative attitude towards most changes in the managerial sphere.
Information about the undeniable advantages and additional opportunities that management accounting is able to give to agricultural organizations is perceived with difficulty and does not find supporters. As a result, specialists who are able to effectively organize this very accounting are sorely lacking.
What can be done?
Where is the way to overcome this situation? According to analysts, it makes sense to resort to the following measures:
- To adapt the existing Western experience to Russian conditions without discounting the availability of successful domestic developments (including the Soviet period), to correctly apply them in the changing conditions of the modern economy.
- To develop fundamentally new parameters, according to which an effective organization of agricultural production is possible, combining them into a coherent system with increased control over decisions made in the field of finance and management.
About competitiveness
If the problem of creating a stable, viable management information system implemented at Russian agricultural enterprises is resolved, the competitiveness of this industry will increase significantly. This, in turn, will allow Russian farmers to increase the total sales of their own products and strengthen existing territorial positions within the domestic market.
Due to the lack of clear regulatory documents in the field of such accounting, Russian legislation requires the development of the necessary standards with a detailed description of the methods and features of their implementation according to industries.
Organization of agricultural production in theory. Why no results?
Theoretical studies existing in this field today do not provide an effective picture of the possibilities of managerial accounting in its practical application. Their authors are mainly engaged in attempts to transform existing Western methods without taking into account industry specifics inherent in Russian agricultural organizations. For leaders to realize the importance and feasibility of introducing a management accounting system, serious economic research is required.
The basis for accounting should be a thoughtful procedure for collecting and processing all necessary primary information. Based on the totality of such data, it is possible to establish cost control in the context of individual objects. We are talking about various crops or their entire groups (in crop production) or animal species in another industry - livestock.
About budgeting
The method of management accounting, called budgeting, allows the heads of agricultural organizations to plan their own capabilities with the subsequent analysis of the results. What are the key points of this method? These include targeting, coordination, and costing. It is carried out by compiling operational budgets with control over their activities using performance reports.
The specifics of budgeting agricultural organizations has distinctive features, namely, the need to plan a variety of indicators (sowing and fertilizer applied, planned harvesting, growth in milk production and livestock, number of animal feeds, etc.). The compiled budget is obliged to take into account the presence of seasonal fluctuations, the peculiarities inherent in each industry (poultry, crop production, animal husbandry, beekeeping), an adjustment for the climatic factor and events of a physiological nature - from the death of the crop to the death of livestock.