Keeping costs up to date in companies that operate in a hyperinflationary economy, such as the one that is developing nowadays in many parts of the world, is not an easy task, due to the constant variations in product prices that are triggered by inflation, shortages and the demanding economic and financial changes that affect the performance and productivity of companies.
In other words, costs constitute a source of financial information that facilitates the economic analysis to be able to make adjustments and procedures, as well as to make administrative and financial decisions, allowing to visualize the economic results and the economic sacrifices made by the company at a given moment.
This is why it is very difficult to recognize, update and adjust when there is a salary increase without severely and significantly affecting operating and financial costs..
The costs represent the expenditures of money made by the company to carry out the different productive processes, through which both the value of labor and the value of inputs and raw materials are reflected, being transcendental for the organizations the information provided in the cost structure since their function is to represent what is the level of participation of each account, how many are the adequate requirements for both the production and the operation of the company.
Therefore, it is crucial for the management and of vital importance for the company to be able to analyze the effect that a salary increase has on the economic benefit and the profit, since the company lacks mechanisms that can leverage and immediately face the salary increases, without affecting the productivity and profitability of the company and without generating labor liabilities that have an impact on the company's profit.
To conclude we can reliably say that these daily difficulties in the current Venezuelan economy are the result of bad economic policies to rescue the productive apparatus of the country, which translates for the companies in product prices that do not match the operating and financial costs, which compromises in the reduction of equity and low profit margins that limit investments and collapsing their plans and business planning.