К.
е. н., доц. Лєгостаєва О.О., Тєльна Ю.С.
Харківський
інститут банківської справи
Університету
банківської справи НБУ, Україна
Recommendations for improving the
management system of current liabilities of PLC "Kharkiv Electric Apparatus
Plant"
Introduction. In the present
conditions of business entities existencethe breach of obligations
terms
leads to their accumulation and money depreciation to
creditors and respectively negatively affects
the financial condition of business.
Relevance of the theme is the need of
connected with improvement of the
current liabilities management of domestic companies.
The purpose of research is the
theoretical assumption and development of practical recommendations aimed at
improving the information provision for current
liabilities management.
The following
problems have been formulated and solved to
realize the objective
of research:
- to
justify
the need of introducing a system of budgeting ongoing
commitment of enterprise;
- to
propose new
approach to motivate employees;
- to develop a
methodology to assess the effectiveness of
credit
use;
- to
explore
ways of optimization of tax payments.
The object of the study are ongoing
obligations of the enterprise.
The subject of research is the
theoretical basis and current liabilities
management practice of PLC "Kharkiv Electric Apparatus
Plant."
A detailed explonation of
the basic material. At the legislative level, current liabilities are defined
as obligations to be repaid during the operating cycle or to be repaid within
twelve months from the balance sheet date. Taxes and fees payments
to the budget make up a significant portion of current liabilities and play an
important role in the enterprise management
system. Management fees and payments should be
currently produced, regardless of the burden
tax level.
The main purpose of this control is the legally affordable taxes and fees optimization that are paid to the
budgets of all levels [2].
Information source for targets formation
and deviation analysis
is the accounting
and tax system of the
business.
As part of tax planning, it provides the tax payments information management process, which is necessary,
actualy and reliable information about current
tax liabilities that are charged and payable.
With the help of planning system
the company's executives receive information reflecting
economic processes and relationship of the enterprise and market. Common understanding
of these phenomena and processes is created through their
system view with a set of indicators of plans. Since the various sections of
the plan are developed interconnected, by the
system plans will allow to make a really
meaningful conclusions if it is complete [4].
Budgeting is an essential element of the
planning process because it provides an opportunity to forecast the receipts and expenditures
of the enterprise.
With the purpose of budgeting current liabilities to "Kharkiv Electric
Apparatus Plant", it is advisable to introduce budgets
system, which will allow to establish strict
control over the receipts and expenditures
of funds to create real conditions for the development of an effective business
financial and economic activities.
The budget of current
liabilities of PLC "Kharkiv Electric
Apparatus Plant" must be completed on the
basic of such
partial budgets:
- budget settlement of accounts payable
for goods, services (connected with the liabilities);
- budget expenditures for salaries and charges on
them;
- budget payment of
tax liabilities (tax budget must be composed for the
further calculation of financial indicators of the company and determination
the impact on their tax payments, and for formation of payment calendar
and tax optimization) [1] ;
- liabilities repayment budget of
non-budgetary payments;
- liabilities repayment budget of
advances received;
- budget of other current liabilities;
Persons engaged in the process of
budgeting should be aware of the significance of their actions and, therefore,
treat the process responsibly. The manager should pay
significcant attention to the matter. Motivation of employees of any company is
one of the main factors of competitiveness and success of modern business.
In recent years the approach to strategy development
of business has been chased encompassing strategic staff
management. Whereas previously it was thought that the strategy should be well
known to only a narrow circle of top executives
and must not be divulged
now a days
openly stated policy
is welcomed.
The strategy should be a matter of not
only the organization's management, but also all of all
its employees
to be effective and efficient [3].
Therefore, the change of approach in
which staff sees as expenses that must
be cut, it is argued the approach that the staff is one of the firm's
resources, which needs to be manage properly
and create conditions for their development, to invest in it.
Analysis of the experience of material
incentives for staff in economically developed countries shows that some of
them have features in common with the Ukrainian experience and only few
different orientation, taking into account individual needs. Thus, in our case,
it is advisable to use such measures as:
- setting the
amount of the incentives of profit in proportion to changes in its size, as
recommended by leading U.S. scientists and economists;
- indexation of
wages, which reflects the cost of living, as is practiced
in
France;
- creation of a
credit fund for the enterprise, as in Sweden, etc. [8, 60, c.].
It is well known that in a market economy
only company whose products have sales function successfully.
In connection with a reduction in the main performance indicators, it is clear
that managing sales and promotion personnel "Kharkiv Electric
Apparatus Plant", which sells products is a priority for
senior and middle management, functional services companies. The basis of
incentive sale workers, we should set such a fundamental
principle: establishment of
direct ratio between the amount of wages and indicators of
the sale of products.
The condition for viability and the basis
for its development in a competitive market is stable. It is affected by a
variety of reasons: strong position of the enterprise market, adjustment of economic ties with partners, high level of logistical
equipment production and application of advanced technologies, effectiveness of
financial and business operations. This leads to different aspects of
sustainability of enterprises, namely general, pricing, financial [7]. The
Report for Shareholders
of
Kharkiv Electric Apparatus Plant "describes the performance analysis of
the financial stability of the plant for 2009-2010
years.
Financial stability is characterized by the solvency ratio. At a rate of 0.5 in
2009 it was 0.61, and in 2010 close to the critical value and was 0.54. This
demonstrates the need for managerial decision making, by which it will be
possible to improve the financial stability of the plant. Such measures involve
making recommendations regarding all aspects of industrial and business
enterprises, including production, marketing, and proper financial subsystem,
namely:
1) staging marketing businesses on a deep
and comprehensive study of markets by type of product, promotion of goods on
the market;
2) elimination of all technical
deficiencies. (Purchase the optimal number of needed equipment);
3) adaptation to market demands;
4) management of current assets and
current liabilities of the enterprise [5].
To implement the said
above the
development of methodologies for assessing the effectiveness of recommended
sources of attraction of credit resources to the enterprise level, as well as
the internal standard techniques adapted to the peculiarities of activity of
JSC "Kharkiv Electric Apparatus Plant"
is offered.
Methods should be developed on the basis
of an algorithm:
- Assess the ability of enterprises to
pay in the future for the credits;
- Investigation of potential ways to
attract loan capital in the short and long term;
- Evaluating the effectiveness of the
ways to attract loan capital;
- Assessment of options for
diversification of the ways to attract loan capital;
- Analysis of the implementation of
strategies to attract loan capital;
- Monitoring the ratio of accounts
receivable and payable, as a significant excess of receivables threaten the
financial stability of the enterprise and the need to attract additional sources
of financing.
Timely payment of taxes in the budget
plays an important role in the management of current liabilities of the
enterprise. Optimization of taxation "Kharkov Electric Apparatus
Plant" must include minimizing tax payments (in the long
and short term for any total trade) and sanctions
exclusion
by the fiscal authorities, which can be achieved by
correct calculation and timely payment of taxes.
Measures to improve the mechanism of tax
payments should be viewed in two ways, namely, decrease in taxes, changes in
the mechanism and timing of tax payment. [4]
The main link minimize tax payments is an effective fiscal policy, which should
include:
- The use of tax incentives;
- The use of target group of regional
entities with different tax systems;
- The use of planning for future periods
of tax payments and income [6];
On
the basis of
the study of this issue we suggest some methods
for tax policy developing that will reduce the tax burden for "Kharkiv
Electric Apparatus Plant."
It
is advisable
to use for "Kharkiv Electric
Apparatus Plant":
1. registration in
special (free) economic zones;
2. registration the company
with the participation of public organizations of disabled people;
3. registration
of
the company in offshore zone that allows
the
company to exercise their right to choose any valid tax law, techniques to
reduce the tax liability, exemption from customs duties, exchange control,
export and import quotas.
Implementation of these recommendations
requires certain cost, but with the systematic application of the above
activities, such costs would be fully justified.
Conclusions.
On
the basis of the abovesaid, the work gives practical guidance on:
- the introduction
of the company "Kharkiv Electric Apparatus
Plant" system of budget planning of current liabilities, which will help to
eliminate the problems associated with the definition of the total amounts of
expenditure on liabilities;
- building a new
system of wages and motivation of workers who are engaged in current liabilities budgeting such as promoting the
efficiency of their activities;
- the use of
methods assessing the effectiveness of credit resources
attracting
of the enterprise, thus avoiding inappropriate
borrowing costs;
- optimization of
tax benefits to PLC "Kharkiv Electric
Apparatus Plant."
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