Innovative approaches to structuring costs for effective business management
Authors: Zadorozhnyi Zenovii-Mykhailo , Panasyuk Valentyna , Ometsinska Iryna 
Published: January 2025

Introduction.The modern national economic model is oriented toward globalization, European integration, enhancing business competitiveness, and resource conservation. However, the challenges faced by the Ukrainian economy have significantly impacted its stability and growth dynamics. In these conditions, the need to improve business management systems is becoming increasingly urgent, particularly through optimizing enterprise costs and revenues to ensure timely adaptation to the rapidly changing external business environment. Accounting and reporting play a pivotal role in this process by providing accurate data for evaluating business performance, forecasting potential risks, and making timely management decisions.
The primary source of information for assessing an enterprise’s performance and determining its development prospects is the statement of financial results (statement of comprehensive income). Despite continuous improvements in reporting, characterized by flexibility, openness to environmental changes, and advancements in accounting science, current challenges demand innovative approaches to its transformation. While traditional methods of reflecting cost information in the financial results report remain significant, there is now a need to integrate modern approaches to cost structuring. These innovations would allow for a more precise analysis of resource usage, future financial metrics, and risk assessment. This would increase the informational value of reporting, making it more useful for decision-making by external and internal stakeholders.
The purpose of the study is to develop innovative approaches to cost structuring and its representation in reporting, with the aim of establishing a robust cost management system, facilitating informed decision-making by external and internal stakeholders under conditions of risk and uncertainty, and enhancing business efficiency.
Methods. The methodological basis of the study was the application of a systematic approach to the formation of information on operating costs for informed decision-making by external and internal users. The following methods were used in the research process: generalization and comparison to identify the impact of negative shifts in the business environment on enterprise activities; grouping, abstract-logical reasoning, analysis, and synthesis to establish the role and interconnections of cost classification by nature, function, and production volume dependency; modelling, analogy, generalization, induction, and deduction to improve financial reporting and develop management reporting on financial results in the area of operating activities.
Results.The study identified the impact of negative shifts in the business environment on enterprise activities and emphasized the urgent need to improve business management efficiency to respond promptly to current challenges. The criteria for cost classification for financial reporting and management systems were explored, revealing the role and interconnection of cost classification by nature, function, and dependency on production volume. This interconnection is a critical prerequisite for constructing an effective cost accounting system and integrating it into the overall management model. The study enhanced the financial results report (statement of comprehensive income) by including information on variable and fixed costs, thereby adapting this reporting form to meet management system requirements and increasing its informational value for both external and internal users. A management reporting format for financial performance related to operating activities was developed, based on the template of financial reporting form No. 2. This format was expanded with information on operating income and expenses, categorized by types of products (works, services) and a «marginal income» line item. This allows management to periodically determine the critical production volume, plan profitability and profitability levels, optimize the product (work, service) assortment, and respond promptly to operational risks. The study highlighted the appropriateness of applying additional cost classification methods depending on the enterprise›s current and strategic goals and the specific needs of particular management tasks.
Prospects for further research. Further scientific research is required to refine cost classification criteria, their interrelations, and functional roles, as well as to develop specialized forms of management reporting. These advancements would enable the creation of an efficient cost management system capable of providing timely and well- founded managerial decision-making in an unstable external environment.