In companies where there are several divisions and branches, it is difficult to calculate the profit of each. You can deduct all costs from all income and get some value. But this approach is not entirely correct. Rather, it will be possible to understand direct and indirect costs, calculate gross profits and only to determine the effectiveness of the business.

Why exactly what they mean all these parameters - consider in this article.

What is direct expenses

Direct expenditures are those belong to a specific branch or point of sale - for example, the salary of specialists in the field, rental of premises where the store is located.

For example, there is a network of coffee shops. Its direct expenditures will be those that are easy to attribute to each specific coffee shop: salary Barista, rental of premises, all sorts of syropters. Everything is very simple here. Best purchases in your CVV Shop and valid CC.

There are less obvious moments. For example, logistics costs. The coffee shop orders grain under the contract with the supplier 2 times a week, and for its transportation is enough 1 courier on the passenger car. No matter how much grain will order the company - 2 times a week will come to it from the supplier. In taking into account, this will affect how direct consumption.

But if the leadership of the coffee shop will want to print a large circulation of printing in Tula, and it will be necessary to deliver it to Moscow, transportation costs will be indirect.

Stop, but we still do not know what is indirect. Let's deal with. Just quickly summarize what direct expenses are.

Direct costs are those that can be attributed to one of the directions without any compromises and assumptions.

What is indirect costs

Indirect costs - the opposite of direct, they cannot be attributed only to one of the business directions. So we spoke a little higher about the printigra - it will be an indirect consumption, because the booklets are not printed for some particular coffee shop, but for everyone at once.

Also, the indirect costs of the coffee shop include a marketer salary, advertising (if the entire brand is advertised immediately), renting a central office. After all, in the central office, we work on all points immediately, therefore, they can not be divided in any way. So, the consumption is indirect.

The easiest way to memorize from the opposite:

If the consumption cannot be attributed to some particular direction, point of sale or branch, it means that it is indirect.
Why you can not count clean profits in directions

We return to our initial problem: how to find out how much each coffee house earns? Suddenly we earn a lot, and the rest work at a loss?

At first glance, it is logical to calculate clean profits for each coffee point. To do this, it is necessary to take the cost of it from revenue. It seems simple, but there is a snag.

Revenue - everything is clear. How much they sold coffee at each specific point, so much and revenue.

Direct costs are also clear. How much they spent on salary, grain, rent, so much will go to the direct expenses of this point.

Indirect costs are not clear. How to calculate the cost of the marketer at each particular point if it launches advertising as a whole coffee brand, and does not spin target on the coffee shop separately?

We have seen a billion more that entrepreneurs in such situations "smear" indirect costs in all directions. Roughly speaking, we have three coffee shops, and we pay $1000 to the marketer. It turns out, at each point there is 20,000 rubles of marketing costs. Here, as it looks like a simplified to the limit example.