Information provision for cost management at the energy supply company: accounting and analytical approach

Authors: 

Levytska I.O.

In the article role of accounting-analysis system as process of cost’s management at 
energy supply company and place of management accounting in this process are highlighted. 
Components and forming of accounting information provision for cost management is 
conducted.  
Determined that reasonableness and prudence of management decisions regarding cost 
optimization at energy supply companies (primarily those that are included in the tariff 
structure), largely depends on the quality of information provision of accounting users, their 
professional knowledge and skills in the use of economic information management. 
An information provision is the process of satisfying information requests, consisting of 
continuous preparation and issuing accounting and analytical information in compliance with 
such requests. We consider that accounting and analytical systems should support synthesis of 
information on its activities in all accounting subsystems: accounting, tax, management and 
statistics.  
Research of management practices of energy supply companies shown that analytical 
component of management system is a harmonious combination of management accounting 
with operative analysis. The reason is that management accounting purpose is to conduct a 
deeper analysis than strictly regulated systematization of entries in the accounts. 
Information provision for cost management, which form the tariffs for transmission 
and/or electricity distribution, is deducted as a collection of data obtained from the 
organization, planning, accounting, analysis and cost control of energy supply company and 
serve as the foundation for their regulation. The important point, however, remains the 
integration of management accounting and control into one synergistic system by holding the 
previous control-analytical processing of financial information within the responsibility 
centers' “Costs”.The following information resources of information provision for system of costs 
management are highlighted: the legal and regulatory framework; internal organizational and 
administrative documentation; primary and consolidated accounting documents; internal and 
external reporting of accounting, management, tax and statistical subsystems; software and 
hardware.  
As a result of effectively implemented system of management accounting the major 
source of information is the internal management reporting detalization cost which is provided 
through a structured, analytical enough work plan accounts. The defining control instrument 
over the formation of the operating costs of transmission and/or electricity distribution is 
budgeting (quarterly, semi-annual, annual).