How to understand the products and services of logistics companies

 

 

Type of logistics cost

Logistics costs generally have the following categories:

 1, general classification: direct cost or operating cost, indirect cost;

 2, according to the scope of logistics functions: transportation costs, distribution processing costs, distribution costs, packaging costs, handling and handling costs, storage costs;

 3, according to the scope of logistics activities: supply logistics costs, intra-enterprise logistics fees, sales logistics fees, recycling logistics fees, waste logistics fees.

 

Composition of logistics costs

The scope of modern logistics costs is broader and runs through the entire process of business operations, from the start of raw material supply to the delivery of goods to the hands of consumers. Logistics costs are classified according to different standards. According to the different main body of logistics costs, they can be divided into the logistics costs of the enterprise itself and the costs incurred by the third party engaged in the logistics business. According to the function of logistics, the logistics costs can be classified as follows:

 

   1. transportation cost. It mainly includes labor costs, such as transportation personnel wages, benefits, etc.; operating expenses, such as operating vehicle fuel costs, depreciation, road transportation management fees, etc.; other expenses, such as travel expenses.

   2. Warehousing costs. It mainly includes the cost of warehouse facilities such as construction, purchase or lease, and the cost of various storage operations.

 3. Distribution processing costs. There are mainly circulation processing equipment costs, circulation processing materials costs, circulation processing labor costs and others.

 4. Packaging costs. It mainly includes packaging material costs, packaging machinery costs, packaging technology costs, and packaging labor costs.

 5. Handling and handling costs. It mainly includes labor costs, asset depreciation, maintenance, energy consumption and other related expenses.

 6. Logistics information and management fees. Including the travel expenses, conference fees, communication fees, management information system fees and other miscellaneous expenses incurred by the enterprise for logistics management.

 

Characteristics of logistics costs

 There are many differences between logistics costs and other costs, but the most prominent ones are only two points. These two points are attributed to the phenomenon of logistics icebergs and the benefits of reverse (alternative profit and loss).

 The phenomenon of logistics iceberg was originally a metaphor proposed by Professor Nishisawa of Waseda University in Japan to study the logistics cost. In the field of logistics, it has now been extended into one of the basic theories of logistics, and it is regarded as the Drucker theory. Another description.

 The theory of logistics icebergs believes that in the enterprise, the cost of most logistics is mixed in other expenses, and the accounting items can be listed separately, but only a small part of it is visible. Misunderstanding that he is the whole picture of logistics costs, in fact, it is just the tip of the iceberg that can be seen on the water.

 Alternate profit and loss phenomenon is another characteristic of logistics cost. There are many sources of logistics cost. The field of cost generation is often in the field of management of different departments. Therefore, the division of such departments makes the related logistics activities impossible. Coordination and optimization, the phenomenon of this long-term loss, the loss of the benefits is often there. In fact, in any large system, such contradictions often occur between system elements. The main purpose of system engineering is also to seek overall optimality from the system level.

Calculation conditions for logistics costs

 According to the iceberg theory of logistics cost, there are many logistics costs that are hidden, and the logistics cost can be large or small, which lies entirely in the scope and method of its calculation. Therefore, when calculating the logistics cost, the calculation conditions must first be clarified. If the calculation conditions are ignored, the logistics cost will lose its meaning. The calculation conditions of logistics cost refer to: logistics scope, logistics function scope and accounting subject scope.

 1, the scope of logistics The scope of logistics as the name suggests, refers to the length of the logistics start and end. The logistics that people usually talk about are: raw material logistics, that is, logistics when raw materials are transferred from suppliers to factories; in-plant logistics, that is, raw materials, semi-finished products, transfer and storage of finished products in different workshops and locations of factories; from factories to warehouses Logistics; from warehouse to customer logistics, this range is quite broad. Therefore, from where to start, as a calculation target of logistics costs, the logistics cost will change greatly.

 2. Scope of logistics function The scope of logistics function refers to which logistics function is used as the calculation object in many logistics functions such as transportation, storage, distribution, packaging, loading and unloading, and information management. It is conceivable that the cost of all the logistics functions as the object of calculation and the two functions of transportation and storage alone are calculated, and the costs obtained are quite different.

 3. Logistics Cost Calculation Subject Range The scope of the cost calculation subject refers to the question of which subjects are included in the calculation subject in the accounting subjects. In the subject, there are expenses such as freight expenses and custody expenses, and there are also internal expenses such as labor costs, depreciation expenses, repair fees, and fuel costs. With so many expenditure items, what is included in the cost calculation object has a great influence on the size of logistics costs. Therefore, the choice of these three aspects determines the size of logistics costs. Enterprises should not blindly or carelessly formulate the calculation conditions, but should determine their reasonable logistics cost calculation scope based on the actual situation of the enterprise. The cost can only be obtained if the cost is compared under the same conditions. Therefore, in order to compare each other's enterprises, when calculating logistics costs, industry standards should be unified as soon as possible.

 

The main problems in logistics cost accounting

 1. The scope and content of logistics accounting are not comprehensive, and only some logistics costs are involved. At present, the scope of daily logistics accounting of enterprises is that Beijing Logistics is more important than procurement logistics and sales logistics, ignoring the accounting of other logistics links. According to the connotation of modern logistics, logistics should include: supply logistics, production logistics, internal logistics, sales logistics, reverse logistics. The corresponding logistics costs include: supply logistics fees, production logistics fees, and internal logistics costs.

 From the accounting content, a considerable number of enterprises only include the expenses paid to external transportation and storage enterprises in special costs, and the logistics costs incurred within the enterprise are often mixed with the production costs, sales expenses, management expenses, etc. of the enterprise. It is easily overlooked and is not even included in cost accounting. The result is an underestimation or ambiguity in logistics costs. It affects the authenticity of accounting information and is not conducive to the decision-making of relevant stakeholders and internal managers.

 2. The disclosure of logistics accounting information is mixed with the disclosure of other cost expenses. From the disclosure of logistics accounting information, since the logistics activities run through the business activities of the enterprise, the accounting of related logistics costs is basically incorporated into the product cost accounting, and is included in the relevant subjects in combination with other cost expenses. For example, the transportation cost, the handling fee, the packaging fee, the storage fee, the reasonable loss during transportation, the selection and finishing fee before the storage, etc., are calculated as the actual cost of the inventory, and then as part of the cost of sales. Deducted from the total sales revenue to get the total profit. The mixed accounting information and other information make the data information of the logistics need to be summarized from the relevant accounting information. The process is complicated and the timeliness of the data is poor, which is not conducive to the evaluation of logistics management and performance.

 3. Part of the logistics cost is part of the company's indirect costs, and its distribution method still uses traditional accounting methods. As the contribution of logistics costs to corporate profits increases, the indirect costs of traditional accounting methods are based on the direct labor hours or machine hours in the production process, which not only distort the cost of products and services, but also is not conducive to the evaluation and evaluation of production performance. The decisions people make based on this data are also incorrect.

 

Accounting method for logistics costs

 1. Divide and calculate logistics costs by payment form.

 The logistics cost is recorded in the form of payment such as freight, storage fee, packaging material fee, self-delivery fee (intra-company distribution fee), personnel fee, logistics management fee, and logistics interest. From this, you can understand the total cost of logistics, and you can also know what funds are most expensive. It is very effective in understanding the importance of rationalizing logistics costs and considering what should be focused on logistics cost management.

 2. Divide and calculate logistics costs by function.

 The logistics costs are calculated according to the functions of packaging, distribution, storage, handling, information, and logistics management. From this method, it can be seen which function is more costly, and the method of calculating the cost according to the form can further find out the crux of realizing the rationalization of logistics. Moreover, the standard logistics cost (unit number, quality, container cost) can be calculated, and the operation management can be performed to set the rationalization target.

 3. Method of dividing and accounting logistics costs according to applicable objects.

 Calculate the logistics cost according to the applicable object, and analyze which object the logistics cost is used for. If you can separate the goods, regions, customers or business units as applicable objects.

 Calculating the logistics cost according to the branch or business office is to calculate the comparison between the logistics cost of each business unit and the sales amount or gross income. It is used to understand the problems in the logistics cost of each business unit to strengthen management.

 According to the method of calculating the logistics cost by the customer, the two calculation methods can be calculated according to the standard unit price calculation and the actual unit price. Calculating logistics costs by customer can be used as a reference for formulating customer strategies as a selected customer and determining logistics service levels.

 The logistics cost calculated by commodity refers to the logistics cost calculated by the method of allocating various types of commodities by using the logistics fee calculated by function. This method can be used to analyze the profit and loss of various commodities. In actual use, it is necessary to consider the crossover ratio between the gross income of the purchase and shipment differences and the product turnover rate.

 4. Calculate logistics costs using the ABC cost method.

 Activity-based cost analysis is the most promising method for identifying and controlling logistics costs.

 Based on the operation, the resources consumed by the enterprise are allocated to the operation according to the resource driver, and the operation cost collected by the operation is allocated to the cost object accounting method according to the operation motivation. The theoretical basis is that production leads to the occurrence of operations, the operation consumes resources and causes costs to occur, and the product consumes operations. Therefore, the cost calculation program under the activity-based costing method allocates various resource pool costs to each operation, and then costs each operation. The cost of the library is allocated to the final product or service.

 Job-centric, not only provides relatively accurate cost information, but also provides non-financial information to improve operations. With the job as the link, the cost information and the non-financial information can be well combined, that is, the cost is allocated based on the operation, and the cost analysis and management are performed on the basis of the operation.

 Applying the activity-based costing method to account for enterprise logistics and manage it can be divided into the following four steps:

 (1) Define the various operations involved in the enterprise logistics system. Assignments are units of work, and the type and number of jobs varies from company to company. For example, in a customer service department, assignments include handling customer orders, solving product problems, and providing customer reports.

 (2) Confirm the resources involved in the enterprise logistics system. Resources are the source of cost. A company's resources include direct labor, direct materials, production maintenance costs (such as the cost of purchasing staff), indirect manufacturing costs, and costs outside the production process (such as advertising costs). The definition of resources is based on the definition of operations. Each operation involves related resources, and resources unrelated to the operation should be excluded from the logistics accounting.

 (3) Confirm the resource driver and assign resources to the job. The assignment determines the consumption of resources, a relationship called resource motivation. Resource drivers are linked to resources and operations, which allocate resource costs on the general ledger to assignments.

 (4) Confirm the cost driver and assign the operation cost to the product or service. The motivation of the operation reflects the logical relationship between the cost object and the operation cost. For example, the product with the most problems will generate the most customer service calls, so the operation cost of solving the customer problem is allocated according to the number of telephones (the job driver here). Go in the product.

 

 Logistics cost analysis method

 There are many methods for logistics cost analysis. The main contents of comprehensive analysis and detailed analysis are briefly described below.

 

 1. Comprehensive analysis of logistics costs in distribution centers:

 After calculating the logistics cost of the distribution center, the following various ratios can be calculated. Then compare these ratios with the previous year and the previous year to examine the actual situation of the logistics cost of the distribution center. It can also be compared with other enterprises in the same industry or compared with other industries. .

 (1) Unit sales logistics cost rate = logistics cost / sales × 100%

 The higher the ratio, the lower the elasticity of price. From the data of the chain enterprises over the years, the general trend can be understood. In addition, by comparing with the same industry and outside the industry, the logistics cost level of the distribution center can be further understood.

 This ratio is greatly affected by price changes and changes in trading conditions. Therefore, there are certain defects in the assessment indicators.

 (2) Unit operating expenses Logistics cost rate = logistics cost / (sales + general management fee) × 100%

 Through the ratio of logistics cost to operating expenses (sales + general management fee), the proportion of chain logistics costs can be judged, and this ratio is not affected by changes in purchase cost, and the value obtained is relatively stable, so it is suitable for chain enterprises. Distribution center logistics rationalization indicators.

 (3) Logistics function cost rate = logistics function cost / total logistics cost × 100% This indicator can clarify the cost of various logistics functions such as packaging fee, transportation fee, storage fee, handling fee, circulation processing fee, information circulation fee, logistics management fee, etc. The ratio of total logistics costs.

 

 2. Detailed analysis of logistics cost of distribution center:

 Through comprehensive analysis, we can understand the changes and trends of logistics costs, but for the reasons that cause changes in logistics costs, we must further analyze the logistics costs according to the functional classification, and then propose countermeasures. The indicators used in the detailed analysis are In the four categories, the development trend and differences of logistics costs can be grasped through the sequential analysis of these four types of indicators or by comparing the departments and facilities in the distribution center and comparing with other enterprises in the same industry.

 

  (1) Indicators related to transportation and distribution:

 Loading rate = actual load / standard load × 100%

 Vehicle activation rate = total number of months of operation / number of units × 100%

 Running turnover rate = total number of months of operation / number of units × 100%

 Monthly mileage of unit vehicles = total mileage of the month / number of units

 Unit mileage travel fee = monthly actual travel three fees / monthly total mileage

 (Traveling three fees = repair fee + internal and external tire fee + fuel fee)

 Unit transportation freight = transportation fee / total transportation

 

 (2) Relevant indicators of custody activities:

 Warehouse utilization = inventory area / total area × 100%

 Inventory turnover = annual withdrawal amount (quantity) / average inventory amount (quantity) = annual withdrawal amount (quantity) × 2 / (year beginning inventory amount + year-end inventory amount)

 

 (3) Relevant indicators of loading and unloading activities:

 Working for a unit