Introduction
1. Budgeting in the enterprise: the essence of the goal and features
1.2 Types of budgets and their goals
Conclusion
List of used literature
In the modern economy of Russia, one of the most important is the national economic problem of identifying reserves for the economic development of an enterprise and the formation of its internal investment resources.
One of the important tools for enterprise management in a market economy is budget planning (budgeting). Budgeting technology provides for a comparison of the planned values of performance indicators at the current moment with the actual ones for adoption management decisions... This element is new for Russian enterprises, and in this case we will talk about budget management.
Budgeting is considered as a universal management tool aimed at organizing and optimizing the business system in order to increase its competitiveness.
Modern trends in the field of management determine that the construction of a budgeting system should be based on a deep study of the market, an understanding of the clientele and counterparties of the enterprise, the involvement of a large number of managers and specialists of different levels of responsibility in the process of budgeting and enterprise management, which confirms the relevance of the chosen topic of the course work.
The aim of the course work is to follow the budgeting system as an element of the enterprise management system.
To achieve this goal, the following tasks were identified:
· To reveal the functions and essence of the budgeting system;
· To identify the regularity of the formation of the budgeting system in the system of enterprise plans;
· To define approaches to assessing the effectiveness of the budgeting system and identifying reserves for its improvement.
The object of research of the course work is the budgeting process, which is carried out by enterprises in the process of carrying out economic activities.
The subject of the research is the enterprise budgeting system.
The works of L.I. Abalkina, A.G. Aganbegyan, S.I. Abramova, V.A. Afanasyeva, V.V. Buzyreva, V.N. Voitolovsky, I.G. Galkina, O. G. Zhuikova, I. V. Eremina, Yu.I. Efimicheva, I.K. Komarova, O. P. Korobeynikova, Yu.A. Lavrikova, V.A. and other scientists.
1.1 Essence and functions of budgeting
Budgeting is the process of drawing up financial plans and estimates, and on the other hand, is a management technology designed to develop and improve the financial feasibility of management decisions. It can be considered as one of the enterprise management tools.
Budgeting - includes the process of planning, monitoring, analyzing and adjusting the financial and economic condition of the enterprise with the distribution of responsibility for the results of the work, the results of which are formalized by the budget system.
In market conditions, it is budgeting that becomes the basis for planning - the most important management function. The entire system of intra-firm planning should be based on budgeting, that is, all costs and benefits should have a strictly financial expression.
The essence of budgeting lies, first of all, in the fact that budgeting is a mechanism through which the current (short-term) goals of the enterprise are managed, and the implementation of the budgeting process is the daily activity of the enterprise.
Thus, budgeting in the system of enterprise plans occupies a key place, since it is responsible for the implementation of the strategy, the efficiency of current production and financial activities and for feedback in the management system.
From a scientific point of view, budgeting is a more complex, more multifaceted concept: on the one hand, it is really identified with the process of development and implementation (organization of implementation) of intra-firm operational plans for resource provision; on the other hand, it is also a planning method; on the third hand, it is also a management technology designed to develop operational decisions and ensure their financial justification.
When considering budgeting as a process, it is important to select budgeting objects. It can be the company as a whole, and centers of responsibility, and individual business operations or groups of operations, and individual projects, etc. It should be borne in mind that budgeting is a closed, interconnected process that has its own specific inputs and outputs, as well as mechanisms and tools by which it is regulated.
It is not without reason that budgeting is seen as the foundation of financial discipline in companies. At the same time, the necessity of allocating centers of responsibility is put forward as an inevitable postulate of the creation of such a system.
Of course, the centers of responsibility help to increase the responsibility of managers for the financial results achieved by these divisions. However, when identifying centers of responsibility, it is important not to forget about the need to preserve the manageability of the company as a whole, about its ability to transform to business requirements. In other words, the imposition of financial discipline should not turn into an end in itself, but should act as a tool, a mechanism in achieving business goals, and, accordingly, the allocation of responsibility centers should be consistent with the requirements of business flexibility.
Budgeting as an integrated system of operational planning, control and analysis of the company's financial and economic activities, first of all, should determine the main cost parameters of doing business, namely: the company's need for financial resources to ensure its solvency; availability of free financial resources during the planning period; the size of the expected profit, composition and structure of capital. The level of detail, the level of accuracy of the predicted values of cost indicators, the composition of budgets should be determined on the basis of the ratio of "costs and benefits" from the setting of a specific budgeting system.
Budgeting as a management technology includes three essential elements:
Budgeting technology, which is a sequence of budget development, the procedure for consolidating budgets of different levels and functional purpose, types and forms of budgets, composition of planning targets, intra-company norms and standards, procedures for drawing up and the procedure for adjusting budgets;
Organization of budgeting, which includes the creation (availability) financial structure(centers of responsibility or organizationally formalized businesses of the company), budget regulations that determine the distribution of functions of the budget management apparatus, a system of internal regulations, job descriptions;
· Automation of settlement operations, including the setting of management accounting based on integrated information processing, which allows you to receive operational information on the progress of implementation (implementation) of the adopted budgets.
The absence of at least one of these elements (conditions) can reduce all budgeting work to zero from the point of view of its practical significance, since the costs of developing a budgeting system may be higher than the potential benefits from the budgeting system. It should be borne in mind that only in single Russian companies a full-fledged management accounting has been established, without which it is difficult to create an effectively functioning full-fledged budgeting system that provides a real increase in the efficiency of management and functioning of the company.
Thus, one of the main functions of budgeting is forecasting (financial condition, resources, income and costs). This is precisely why budgeting is valuable for making management decisions.
1.2 Types of budgets and their goals
Budgeting creates the preconditions for the growth of the efficiency of using the firm's resources and represents a high-tech means of operational financial planning providing a prompt assessment of the results of the firm's activities and, if necessary, the ability to timely adjust plans; it helps to unite the efforts of all divisions of the company to achieve the set goals.
Budgeting as a process includes certain stages. The main stages are:
· Formulation of tasks;
· Calculation of available resources;
· Negotiations between stakeholders on budget figures;
· Coordination and verification of components;
· Final approval;
· Distribution of the approved budget.
When setting budgeting, one of the primary problems that need to be addressed is the definition of the composition (format) of budgets, primarily their items. This is especially important for operating budgets, since there are no legally regulated forms of intra-firm budgeting, and each firm independently makes decisions both on the composition of the budget forms and on the composition of the planned indicators. In other words, the composition of operating budgets is the prerogative of the developers of the budgeting system for each firm.
Nevertheless, in theory and practice, a certain set of operating budgets has been developed. It includes budgets:
· Sales;
· Production budget (production program);
· Material costs (inventory items);
· Direct labor costs;
· General production costs;
· Workshop cost;
· Selling expenses;
· Administrative expenses;
· General operating expenses.
It is during the development of operating budgets that the level of accuracy of forecast calculations and the degree of detailing of planned indicators are set, and approaches are developed, specific methods are applied to reduce the influence of uncertainties in the external environment.
Sales budget. It provides a sales forecast by product type and by the company as a whole, with a breakdown by planned periods (year by quarter; quarter by month; month by decade, week).
The sales budget is drawn up in physical and value terms and serves as the basis for the formation of other budgets. The sales volumes of each type of product can be shown in relation to different conditions of sale: region, season, type of buyers (wholesale, retail), etc. The longer the budgeting period, the lower the accuracy of the sales forecast. The most dynamic factor here is future selling prices. Therefore, it is advisable to indicate in the budget optimistic and pessimistic, the most probable values of sales volumes, thereby, as it were, setting a corridor of possible future results, including future profit margins.
The production budget is a plan for the release of products, taking into account the stocks of finished products at the beginning and end of the budget period in physical units of measurement for individual types of products and for the company as a whole. Production planning is carried out in accordance with the sales budget. When developing this budget external factors play a lesser role and lend themselves to a more accurate forecast for the year and even longer periods.
The budget of material costs contains information on the consumption of raw materials, materials, purchased products, components per unit of finished products and their needs for the planned volume of production by types of products and the company as a whole. The calculation is carried out in physical and value units. The budget can also provide a calculation of the volume of purchases of planned materials, taking into account the expected consumption and stocks in the warehouse. When forming this budget, much depends on the validity of the norms and standards in force at the enterprise, as well as on the warehouse policy and the policy of working with suppliers. In other words, the reliability (accuracy) of forecasts can vary widely here.
The direct labor cost budget contains information on the labor intensity of manufacturing each type of product produced and for the company as a whole. The need for labor costs is calculated in man-hours and in value terms. Calculations are carried out on the basis of data from the production program, labor intensity of manufacturing a unit of manufactured products and in-house standards for the cost of one man-hour. As a rule, the development of this budget does not cause any particular difficulties due to the certainty of the systems of remuneration in the firm.
The budget for general production (shop) costs contains, as a rule, information on the costs of remuneration of administrative and managerial, engineering and technical and auxiliary personnel directly employed in the divisions of the main and auxiliary industries; lease payments for leased production property, expenses for the maintenance and operation of equipment, travel and other types of expenses associated with general production activities during the budget period.
In the budget of the workshop cost of production, the costs of materials, wages are brought together, the share of general production costs attributed to the workshop cost is calculated. In the budget, it is important to allocate variable and fixed costs for each type of product. It should be borne in mind that the structure of the shop cost budget depends on the method of management cost accounting (Direct Costing, Standard Costing, regulatory accounting, etc.).
The budget for selling expenses includes operating costs associated with the sale of products, including transportation costs, commissions, and costs associated with marketing activities. It is recommended to divide these costs into fixed and variable for a more reasonable calculation of the total cost and profit.
The budget for administrative expenses contains data on the remuneration (wages) of administrative and managerial, engineering and technical and auxiliary personnel of the management apparatus of the company as a whole, as well as travel and other organizational expenses during the budget period. The budget for general business expenses includes other plant-wide (general) costs associated with the maintenance and operation of machinery and equipment used in the general interests of the company, contains data on remuneration (wages) of administrative and managerial, engineering and technical and auxiliary personnel of the company as a whole. , as well as travel and other general organization expenses during the budget period. In the budgeting system, operating budgets act as a source of reliable data for the development (preparation) of three main financial plans (budgets), namely a plan of income and expenses (profit and loss), a forecast balance and a movement plan Money, which together make it possible to assess the future financial condition of the enterprise. If it does not ensure the achievement of the goals and objectives of the enterprise for the planned period set before the management, then the operating budgets are adjusted and, accordingly, new versions of the three main financial plans (budgets) are obtained. This process continues until the future financial position the enterprise will not satisfy the managers. Modern budgeting systems as integrated systems of operational in-house planning, accounting and analysis should also provide control over the progress of budget execution, and their timely correction, if necessary. Thus, within the framework of budgeting, operational and financial plans are linked and tracked, which contributes to the achievement of goals and objectives set for managers in the most efficient way.
1.3 Features of budgeting in enterprises of various sizes
The budgeting system has its own characteristics depending on the type of business, organizational structure, as well as the size of the enterprise.
Currently, many large companies use a whole range of strategic and operational management tools, the most important component of which is budgeting.
Budgeting system large companies must ensure active in-house coordination of activities in all key areas and elements, covering changes in economic assets and their sources, identifying risks and reducing their level, increasing the flexibility of functioning, is the main tool for implementing the strategic objectives of the organization. A real long-term increase in the efficiency of a large enterprise through the use and creation of competitive advantages with a targeted focus on increasing the value of the company is possible only on condition that the current activities of the enterprise are planned and monitored based on strategic goals and tactical tasks that ensure their implementation, which are embodied in specific budget indicators.
The use of budgeting in a large enterprise is effective if it is based on general scientific principles of planning. The latter make it possible to substantiate the need for management decisions to be made and to predict the likelihood of obtaining the expected results of an economic entity's activities. Their correct observance creates the preconditions for the efficient and rational operation of an enterprise of any form of ownership. Various types of budgets, formed during the functioning of the budgeting system, do not exist autonomously from each other, but as a system. Therefore, the budgeting system is built in accordance with the structure of management at the enterprise, the presence of branches and subsidiaries.
Currently, there are many types of budgets, applied depending on the structure and size of the organization, the distribution of powers and the characteristics of the activity. Organizational and technical procedures for the implementation of a budgeting system in a large enterprise include the following stages:
· Development of strategic goals and their specification by tactical tasks to determine the framework and directions of operational budget planning and control;
· Diagnostics and improvement of the existing organizational structure and the structure of planning bodies at the enterprise;
Diagnostics and improvement information system enterprises;
· Diagnostics of the state of the existing planning system;
· Determination of the availability of a special document governing the process of planning and control over the activities of the enterprise;
· Training of specialists;
· Direct implementation of the budgeting process and its automation.
The introduction of a budgeting system in a large enterprise should be carried out in stages. At the first stages, it is necessary to use only some elements, gradually complicating the system in case of successful completion of certain stages of raising the level of financial culture of management and personnel. Small businesses often do not use a budgeting system. Implementing a budgeting system is costly, so most small businesses cannot afford it. In addition, the introduction of a budgeting system is advisable only when the simpler enterprise management mechanisms no longer work.
Thus, budgeting is part of the management system and constantly interacts with it. The interaction of the management and budget systems takes place within the framework of a previously developed mechanism for introducing the budgeting process into the enterprise management system.
The size of the enterprise depends on the structure of the budgeting system and its effectiveness. The introduction of a budgeting system is advisable only in large enterprises.
2. The budgeting system as an element of the enterprise management system
2.1 Budgeting in the enterprise plan system
In the system of enterprise plans, there are long-term and short-term (current) budgets, as we have already mentioned. At the same time, long-term budgets are primary in relation to short-term ones, because it is on their basis that a short-term budget is drawn up, but the enterprise is managed through a short-term budget, because it is he who gives the criteria for making current decisions, and based on the analysis of its execution, decisions are made about adjusting long-term budgets or even company goals.
Therefore, budgeting in the system of enterprise plans should be understood as enterprise management through short-term budgets. Then it becomes necessary to understand the place of budgeting in common system enterprise management and its relationship with other elements, for this, consider Figure 1. Appendix 1.
As you can see from the figure, the starting point is the mission of the enterprise - this is what the enterprise wants and knows how to do. The mission is changing, but very slowly. It is closely related to strategy - the basic idea of what exactly the company makes money on.
The last link is budget management, i.e. fulfillment of the mission and implementation of the enterprise management strategy. Budgeting is the lowest level of planning, at which the cost of actions is planned directly, through which the entire vertical of plans, both strategic and operational, is implemented (Fig. 2 Appendix 2).
Each level of this scheme forms a separate control loop and has its own content. For example, at the level of goal setting, it looks at exactly what the company wants to achieve; at the strategy level, it is planned how the company wants to achieve its goals, and at the operational level, how the strategy will be implemented
Since the subject of our consideration is budgeting, we will reveal it in the presented yet another scheme (Fig. 3. Appendix 3). "Budgeting" begins at the moment when the plans (very different) and the budgets of the enterprise are allocated to the centers of financial responsibility that make up the financial structure.
This distribution can happen in very different ways - both "from above" and "from below", as long as we do not care; what is important is that each Center for Financial Responsibility (CFR) either receives the items related to it of each of the three main budgets, or receives the items related to it of each of the three main budgets:
· Income and / or expense items from the budget of income and expenses;
Items that reflect the receipt and departure of funds from the cash flow budget and
· Items reflecting changes in assets and liabilities.
Combining data on the relevant items of each CFD will give us a Profit and Loss Statement (income and expenses), a Cash Flow Budget (receipts and payments) and a Balance Sheet (changes in assets and liabilities). If this merger took place in the course of planning activities, then the documents received will be predictive, and if during control, then actual.
Both forecast and actual data allow in advance or, accordingly, in fact, to carry out a full financial analysis and assess the liquidity, profitability and value of the enterprise. At the planning stage, these indicators are needed in order to understand how realistic it is for the enterprise to achieve its goals. If they show that the goals are achievable, then the plans are accepted for execution, if not, the budgeting process goes through a "second iteration" and the conditions are determined under which the achievement of goals becomes possible - and so on until the optimal one from the management's point of view is found. enterprise option.
2.2 Budgeting in the enterprise management cycle
In the budgetary management, all the same stages of the cycle are observed, acquiring the specifics characteristic of this level:
· The stage of decision-making and planning turns into the stage of developing budgets;
· The execution stage becomes the stage of collecting information on budget execution (actual budget data);
· The stage of control turns into a stage of plan-fact control of budget execution;
· The analysis stage involves the analysis of budget reporting (plan-fact, factor analysis, analysis of the effect and efficiency of execution, etc.);
· The stage of the formation of managerial influence becomes the stage of adjusting budgets.
Let's consider each stage in more detail.
1. Planning (development of budgets). The company has already set its goals, including financial ones, and has developed a strategy corresponding to these goals. The quantitative parameters of goals and strategies become guidelines for establishing the current performance indicators of the enterprise. Based on these guidelines, each Central Federal District forms its own budgets by line. At the enterprise level, these budgets are consolidated, which forms three main budgets: the Cash Flow Budget (BDM), the Revenue and Expenditure Budget (BDR), and the Balance Budget (Management Balance). The forecast plan of the enterprise prepared and agreed upon by iterations in the budget format, after analysis for compliance with the set goals, is approved by the management and becomes a directive document mandatory for all Central Federal District (and the enterprise). It is clear that for a clear organization of such a "multi-pass" process, an enterprise must develop and approve a corresponding regulation.
2. Taking into account the factual data. While the enterprise as a whole and each CFD are fulfilling their plans in real practice, the process of accounting for the actual performance indicators of the CFD and the enterprise according to the same items for which the planning was carried out is going on in the budget management loop. At the same time, each Central Federal District conducts its current production and financial activities, relying on its own budget (being within its framework), moreover, being responsible for its observance. If the budget is drawn up correctly, this practically guarantees the company will achieve the planned financial goal.
3. Control of deviations. To monitor compliance with budgets in real time, the ongoing monitoring of emerging deviations of actual data from the planned (monitoring in the format of plan-actual deviations) is carried out, which allows both each Central Federal District and the enterprise as a whole to quickly identify negative trends and prevent their development already at an early stage. stages.
At this stage, a certain moment of analysis appears, but it is too weak to talk about analysis fully - we are only talking about tracking the emerging deviation, especially negative, so that it does not turn into a problem.
4. Analysis of performance and reporting. The analysis is carried out at all stages of budget management: first, plans are analyzed for their compliance with the financial goal of the enterprise, then the deviations that arise are analyzed in the current mode to prevent the strengthening of negative trends, and the latter analyzes the reporting on the actual implementation of the budget of the Central Federal District and the entire enterprise. This "final analysis", which should be carried out both at intermediate stages (decade, month, quarter - the frequency depends on the specifics of the enterprise, primarily on the duration of production and operating cycles), and after the end of the budget period (year).
The depth of analysis is determined by the tasks for the solution of which it is necessary to obtain data, but in the general case, the following "immersion levels" are distinguished:
· Analysis of plan-fact deviations in size and direction. At this stage of the analysis, we decide whether the deviations are desirable or not, significant or negligible.
· Factor analysis of deviations. Already by the name of the stage, it is clear that we are talking about identifying the reasons (factors) that predetermined the deviation of the actual value of the indicator from the planned one. At this stage, the question is decided what is the nature of the factor: subjective or objective, long-term or accidental, and whether this factor needs to be taken into account for the future, when adjusting plans. In principle, the analysis could be considered complete already at this stage, since the way out to the formation of managerial influence has already been obtained; however, sometimes one more stage stands out:
· Analysis of the efficiency of budget execution, which identifies deviations, their causes and all other attributes that are not related to the fact that the actual volumes of work (sales, production) deviated from the predicted value. But we will return to this in Section 20 on analysis.
5. Making management decisions. The results of the analysis are used to make appropriate management decisions: in the current mode - to adjust the current budget, and after the end of the budget period - to form a new budget for the next period. Thus, the steps are repeated in the order already described.
At the same time, attention should be paid to the fact that the implementation of operational plans simultaneously means the implementation of some, even the smallest, part of the long-term (strategic) plan of the enterprise. If the company does not keep up with the current indicators linked to strategic goals, then the strategic plan to achieve them will not be fulfilled.
Of course, the direction and magnitude of "non-compliance" are of fundamental importance here: if the deviations are frankly random and / or simply negligible, then this may not affect the implementation of the strategic plan in any way.
The situation is more interesting with the desired deviations. Usually their appearance, and even more than once, means that the plan was not drawn up intensively enough.
And if they are not taken into account in a timely manner in the adjusted budget, this can lead to "relaxation" of the team, loss of motivation and deterioration in the quality of work - with all the ensuing extremely unpleasant consequences.
2.3 Budgeting and strategic enterprise management
Budgeting is organically integrated into the strategic management system and helps, carrying out daily activities, to implement the long-term strategy of the enterprise. The relationship between budgeting and strategic management is illustrated by the diagram in Fig. 4. Applications 4. The process begins with the formation of a business ideology.
The formation of a business ideology presupposes, first of all, the formulation of a mission (block 1), in accordance with which all further activities of the enterprise will be determined:
· Goals will be set (block 2), including financial ones;
· Developed a strategy to achieve them (block 3);
A BSC map has been prepared - indicating 4 prospects: finance, customers, processes, personnel / infrastructure, or, in case of management without a balanced scorecard, an action plan for the implementation of the strategy (block 4), within which, for example, the purchase of new equipment is provided - from - for physical or moral deterioration of the old one.
To implement this set of measures, the enterprise uses its organizational structure (block 5). If we are talking about the purchase of equipment, then in the organizational structure of the enterprise there is a unit that is functionally responsible for the implementation of such activities. Let in our example it will be the Supply Department (block 6). In financial terms, all the planned activities will be presented in the Financial Plan (block 7), where the line "Investments" will appear.
On the basis of the organizational structure, taking into account the distribution of responsibilities, a financial structure will be created (block 8), within which the OS Cost Center (Supply Department, block 9) will appear. After starting the budgeting process (block 10), the financial plan will turn into budgets, which will be calculated by each central federal district and as a result of the consolidation of which the company's budget will be obtained (block 11) in the form of 3 main forecast budgets - BDDS, BDR and Balance. Since our separate task is to purchase equipment, then the Investment Budget (block 12) must be added to this obligatory triad. They will be analyzed (block 13) in terms of how they lead the enterprise to the set goals, and after approval they will become a working document according to which the enterprise will live for the entire next planned period (usually a year).
Thus, the implementation of the annual plan will mean the implementation of the next stage of the strategic plan, and budgeting as an operational management system will be organically integrated into the long-term (strategic) management system. This is how successful companies around the world are run.
3. Using the budgeting system at Navarros LLC
3.1 Economic characteristics of the enterprise
Restaurant "Navarros", the full name of the company with limited liability"Navarro's Bar & Grill" began its work on April 17, 2007. Restaurant "Navarroc" is named after its owner and chef "Yuri Navarro".
Restaurant "Navarros" is a place famous for the traditions of true Mediterranean hospitality. Sun-cream colors with bright orange splashes, comfortable sofas with light draperies, sheathed vintage armchairs in pastel colors and dark wood cabinets, soft lighting before sunset, Spanish ceramics with sayings drawn by the hand of an experienced calligrapher - everything here is created in order to feel cozy and joyful the homely atmosphere that distinguishes traditional Mediterranean restaurants.
The whole family comes to Navarros LLC with small children, who can be left with clowns and animators who perform on weekends. Classic Italian cuisine coexists peacefully with traditional Peruvian gastronomic influences. The author's vision of taste in combination with the preferences of the guests of the restaurant gives rise to the culinary eclecticism of Navarros LLC, where fresh dizzying aromas coexist with familiar sketches on the theme of home cooking.
The restaurant is represented by two floors that combine two halls, designed in the style of the "European courtyard", and a bright, cozy bar area. Modern technical equipment (air conditioning system, lighting, sound) makes this establishment convenient for banquets and receptions. The restaurant staff has extensive experience in organizing events of any complexity.
Let's analyze the profit and profitability. Data for assessing the dynamics of profit indicators for 2007 are given in table. 3.1.
Table 3.1
Financial results of Navarros LLC
| Indicators | In 2007 | In 2008 | The change |
|
| Thousand. rub. | Thousand. rub. | Thousand. rub. | % | |
| 1. Profit (loss) from the sale of products | 3604 | 4751 | 1147 | 31,8 |
| 2. Interest receivable | 0 | 0 | 0 | 0 |
| 3. Interest payable | 0 | 0 | 0 | 0 |
| 4. Income from participation in other organizations | 0 | 0 | 0 | 0 |
| 5. Other operating income | 1216 | 1192 | -24 | -2,0 |
| 6. Other operating expenses | 1642 | 576 | -66 | -4,0 |
| 7. Non-operating income | 2548 | 2236 | -312 | -12,2 |
| 8. Non-operating expenses | 3186 | 2748 | -438 | -13,7 |
| 9. Profit (loss) before tax | 2540 | 3855 | 1315 | 51,8 |
| 10. Income tax and other similar mandatory payments | 846 | 1196 | 350 | 41,4 |
| 11. Profit (loss) from ordinary activities | 1694 | 2659 | 965 | 57,0 |
| 12. Extraordinary income | 0 | 0 | 0 | 0 |
| 13. Emergency expenses | 0 | 0 | 0 | 0 |
| 14. Net profit (retained earnings (loss) of the reporting period) | 1694 | 2659 | 965 | 57,0 |
The table shows that the amount of profit before tax increased in the reporting year by 1,315 thousand rubles, which amounted to 51.8%. This led to a corresponding increase in the profit remaining at the disposal of Navarros LLC.
In dynamics financial results the following positive changes can be noted. Net income grows faster than sales profit and pre-tax profit. The increase in the total amount of profit was due to an increase in profit from the sale of products by 1,147 thousand rubles, or by 31.8%, as well as a decrease in other operating expenses by 66 thousand rubles, or 4%, and non-operating expenses by 438 thousand rubles. ., or 13.7%. At the same time, the dynamics of financial results also includes negative changes. At the end of the year, compared to the beginning, there was a decrease in other operating income by 24 thousand rubles, or 2%, and non-operating income by 312 thousand rubles, or 12.2%.
Table 3.2
Dynamics of profitability coefficients of Navarros LLC
| Indicators | In 2006 | In 2007 | Change (+, -) | |
| Initial data, million rubles | ||||
| 1. Revenue (net) from the sale of products | 25 852 | 34 374 | 8522 | |
| 2. Total cost of goods sold | 22 248 | 29 623 | 7375 | |
| 3. Profit from the sale of products | 3604 | 4751 | 1147 | |
| 4. Profit before tax | 2540 | 3855 | 1315 | |
| 5. Net profit | 1694 | 2659 | 965 | |
| Profitability ratios | ||||
| 6. Return on costs,% | 16,20 | 16,04 | -0,16 | |
| 7. Return on sales of taxable profit,% | 9,825 | 11,215 | 1,39 | |
| 8. Return on sales by profit from sales,% | 13,94 | 13,82 | -0,12 | |
| 9. Return on sales by net profit,% | 6,55 | 7,74 | 1,19 | |
| 10. Return on property,% | 10,82 | 12,45 | 1,63 | |
| 11. Return on equity,% | 13,55 | 15,61 | 2,06 | |
On the whole, the company has seen an improvement in the use of property. From each ruble of funds invested in assets, the company received more profit in the reporting year than in the previous period.
If earlier each ruble invested in property brought in almost 11 kopecks. profit, but now - 12.5 kopecks.
The return on equity increased over the reporting period by 2.06 percentage points. The profitability of sales in terms of net profit also increased. The reason for the positive shifts in the level of profitability was the outstripping growth rates of profit received from the results of financial and economic activities (profit before tax) and net profit, compared to the growth rate of property value and sales volume. An increase in profitability of sales can mean an increase in demand for products, an improvement in their competitiveness.
3.2 Assessment of the enterprise budgeting system
Let's present the budgeting procedure for Navarros LLC. The overall budget of an organization consists of an operating budget and a financial budget. The main activity of the enterprise is catering business... Based on this, the operating budget is represented by the budgets for the purchase of goods, sales and distribution costs. The purpose of drawing up an operating budget is to generate a profit and loss statement. Determining the target volume and structure of sales (unlike most other stages of development, the draft consolidated budget) is more of a management art than a routine procedure. Nevertheless, the basic principles of interconnection of cost indicators, price level, physical volume as factors determining income from sales are the methodological basis without which effective planning of the sales budget is impossible. First, a sales forecast is drawn up (Table 3.3). The sales budget is the starting point in the budgeting system, since the sales plan (in the former terminology - the sales plan, order plan, delivery plan, etc.) affects almost all other budgets of the enterprise (all plans of the company's business activities).
Table 3.3
Sales budget of Navarros LLC for 2008
In 2007, the total proceeds from sales of the restaurant's products amounted to 34374 thousand rubles. In 2008 it is planned to sell products and provide services for a total amount of 46405 thousand rubles, which is 135% or 12031 thousand rubles more than in 2007.
The main source of income for the organization is the sale of dishes. In 2008, sales growth is planned in the amount of 138% or 10,433 thousand rubles. The increase in the volume of services for holding festive events is planned to increase by 123% or 859 rubles in comparison with 2007. Revenues from offsite services in 2008 are planned at the level of 4176 thousand rudders, which is 122% more than in 2007.
In general, the growth of income of OOO Navarros in 2008 is planned at a rate of 135%. Next, we will calculate the expected cash flows in 2008. To do this, consider the budget for cash receipts.
The peculiarity of the work of Navarros LLC with its debtors is that the payment by installments for the meals produced and the services rendered is provided for a period not exceeding 3 weeks.
Table 3.4
Budget of cash receipts to Navarros LLC in 2008
As can be seen from table 3.4, the amount of cash receipts is lower than the proceeds. This is primarily due to the fact that buyers with deferred payment pay for the product later, when the product has already been sold. In 2008, accounts receivable are expected to grow by 144% or RUB 3120 thousand. The growth of accounts receivable is not a positive factor, since it temporarily diverts funds from the company's turnover, however, with an increase in sales and taking into account the modern development of the commercial lending system, an increase in accounts receivable indicates an increase in sales. In general, the organization plans to receive funds in 2008 in the amount of 43,285 thousand rubles. The inflow of funds is not uniform by quarters, and tends to increase, which is primarily due to the decrease in demand for products and services at the beginning of the year.
Carrying out restaurant activities "Navarros" LLC has partnerships with a large number of clients.
To increase sales of products, the organization uses a commercial lending system, therefore, the dynamics of accounts receivable is of great importance in the effective management of the company. Consider the budget for the movement of receivables (Table 3.5).
Table 3.5
Accounts receivable budget of Navarros LLC for 2008
In 2008 accounts receivable will amount to 10,152 thousand rubles. If we consider the quarterly movement of accounts receivable, it is clear that at the beginning of the year its size decreases, and by the end of the year it increases, which is due to the seasonality of demand for the products and services of the enterprise.
The growth of accounts receivable is a negative factor, but the organization can smooth out its negative impact by increasing its accounts payable to suppliers. The organization has reserves for the growth of accounts payable, which will be considered in detail when analyzing the accounts payable budget.
The main activity of the restaurant is stocks of products. In budgeting, inventory planning is carried out using the purchase budget. Let's consider it, table. 3.5
The need for stocks directly depends on the volume of sales. The growth of sales volumes at Navarros LLC is planned at a rate of 138% (Table 3.5). To fulfill the sales target, the company must plan for an increase in the volume of inventories.
You can determine the amount of inventory using the following formula:
Commodity stocks plan = (∆Vvyr * Vtzp) + (Vtzp * 10%), (3.1)
∆Vwyr - the rate of growth of revenue,%
· Vtzp - the volume of commodity stocks;
· (Vtzp * 10%) - guaranteed stock.
According to the balance sheet data, stocks at the end of 2007 amount to 9394 (excluding VAT) thousand rubles.
Inventories in the planned 2008 will be:
TZ plan = (9394 * 138%) + (9394 * 10%) = 13898 thousand rubles
In addition, when planning stocks, the change in demand during the year must be taken into account. Let's make calculations in table. 3.6
Table 3.6
Procurement budget of Navarros LLC for 2008
The procurement budget for the products of OOO Navarros for 2008 is planned in the amount of 31350 thousand rubles. The sale of stocks is planned in the amount of 26,846 thousand rubles. The balance at the end of the year will amount to 13898 thousand rubles.
The next step in enterprise budgeting is cost and cost budgeting. The organization's circulation costs are one of the generalizing indicators of the intensification and efficiency of resource consumption. The profitability of the organization depends on their size and degree of change.
First, let's review the commercial expenses budget.
To plan selling expenses, you need to use the "percent of sales" method. This method will be used to variable costs treatment. Let's review the budget of commercial expenses, tab. 3.7
Table 3.7
Commercial expenses budget of Navarros LLC
Cost items Appeals |
In 2007 | In 2008 (plan) | Deviation | |||
| (+;-) | % | |||||
| Sum | Ud. weight | Sum | Ud. weight | thousand rubles | ||
| (thousand rubles) | (thousand rubles) | |||||
| 1.Proceeds from the sale | 34374 | 100 | 46 405 | 100 | 12 031 | 135 |
| 2. Selling expenses | 1433 | 4,2 | 1834 | 4,0 | 401 | 128 |
| 2.1 Transport costs | 76 | 0,2 | 108 | 0,2 | 32 | 142 |
| 2.2 Advertising | 172 | 0,5 | 229 | 0,5 | 57 | 133 |
| 2.3 Packaging | 29 | 0,1 | 24 | 0,1 | -5 | 83 |
| 2.4 Commissions | 516 | 1,5 | 679 | 1,5 | 163 | 132 |
| 2.5 Rent and maintenance costs of fixed assets | 158 | 0,5 | 202 | 0,4 | 44 | 128 |
| 2.6 Travel expenses | 72 | 0,2 | 73 | 0,2 | 2 | 102 |
| 2.7 Market Research Costs | 158 | 0,5 | 202 | 0,4 | 44 | 128 |
| 2.9 Other expenses | 254 | 0,7 | 317 | 0,7 | 64 | 125 |
In 2008, it is planned to increase selling expenses by 128% or 401 thousand rubles.
The amount of fixed costs, such as rent, settlement and cash services, is determined for each item separately. Lease payments for the lease of an office building, vehicles are determined on the basis of prolonged lease agreements, taking into account the increase in the cost of utilities. The same approach was used to determine the amount of expenses for banking services.
Next, we will consider the budget for administrative expenses, tab. 3.8. Management costs include expenses not related to production or commercial activities enterprises (salaries for managers, maintenance of non-production property, business trips, communication services, interest on loans, taxes, etc.). It is advisable to take the composition of these costs taking into account the cost elements.
Table 3.8
Budget of administrative expenses of "Navarros" LLC for 2008
| Indicator | In 2007 | In 2008 | Deviation | |||
| Items of administrative expenses | Amount, thousand rubles | % | Amount, thousand rubles | % | (+,-) | % |
| 1. Material costs | 2608 | 37,0 | 3275 | 36,3 | 667 | 125,6 |
| 2. Salary of management personnel | 1762 | 25,0 | 2210 | 24,5 | 448 | 125,4 |
| 3. Accruals of UST | 462 | 6,6 | 559 | 6,2 | 97 | 121,0 |
| 4. Depreciation | 756 | 10,7 | 992 | 11 | 236 | 131,2 |
| 5. Taxes | 214 | 3,0 | 361 | 4 | 147 | 168,7 |
| 6. Interest on loans | 978 | 13,9 | 271 | 3 | -707 | 27,7 |
| 7. Other costs | 268 | 3,8 | 1353 | 15 | 1085 | 504,9 |
| Total | 7048 | 100 | 9021 | 100 | 1973 | 128,0 |
In 2008, it is planned to increase administrative expenses by 128% or 1973 thousand rubles. At the end of the budgeting of the organization's costs, we will consider the budget for the cost of production.
Table 3.9
The budget of the production cost of Navarros LLC for 2008
The growth of the prime cost of sales and rendering of services is planned in the amount of 128% in comparison with 2007. The increase in direct material costs is planned by 30% compared to the previous year.
Cost growth is significantly lower than the growth in revenue from sales and services, which is generally a positive factor and will have a positive effect on the financial condition of the organization.
LLC Navarros has several types of creditors:
· Suppliers and contractors with whom the company pays for the supplied goods (work, services);
· Own employees, with whom the company pays wages;
· The state budget with which the company pays for taxes;
· State non-budgetary funds, with which the enterprise pays according to the unified social tax;
· Credit institutions or other borrowers with whom the company pays off loans and borrowings.
In 2008, Navarros LLC plans to increase accounts payable to suppliers by 3120 thousand rubles in order to smooth out the negative impact of growing accounts receivable.
The organization's debt to other creditors is planned to be kept at the 2007 level. Let's review the budget of settlements with creditors, table 3.10.
Table 3.10
Budget of settlement with creditors of Navarros LLC for 2008
In 2008 the accounts payable will increase in the whole enterprise by 27% or 3120 thousand rubles. The growth of accounts payable in 2007 amounted to 34%, thus, there is a decrease in the growth rates of accounts payable compared to the reporting year. The next stage of financial planning is to budget the income and expenses of the company.
The budget of income and expenses (Table 3.11) is intended for planning the financial results of the work of Navarros LLC.
In traditional accounting, it corresponds to a profit and loss statement (form No. 2 of the appendix to the balance sheet). This is the resulting planning document, since here, when it is drawn up, the planned values of profit are calculated, and making a profit, as you know, is the goal of the activities of Navarros LLC.
That is why it is extremely important to know the size of the profit in advance and only then it is possible to develop plans for using the profit for investment purposes, repayment of loans and borrowings, and solving other economic issues. When drawing up the budget for income and expenses of Navarros LLC, it is taken into account that when planning proceeds (incomes) and expenses (expenses), it is carried out according to the "shipment". The values of other operating, non-operating income and expenses are planned to be kept at the 2007 level.
Table 3.11
Budget of expenses and incomes of Navarros LLC for 2008
| Indicator | In 2007 | In 2008 (plan) | The change | |
| (+,-) | % | |||
| 1. Income and expenses from the sale of products and the provision of services | ||||
| 1.1. Revenue from sales of products and services | 34 374 | 46 405 | 12 031 | 135 |
| 1.2. Cost of sales of products and services | 21142 | 27062 | 5 920 | 128 |
| 1.3. Business expenses | 1433 | 1834 | 401 | 128 |
| 1.4. Administrative expenses | 7048 | 9021 | 1 973 | 128 |
| 1.5. Sales profit | 4 751 | 8 488 | 3 737 | 179 |
| 1.6. Other operating income | 1192 | 1192 | 0 | 100 |
| 1.7. Other operating expenses | 1576 | 1576 | 0 | 100 |
| 1.8. Other non-operating income | 2236 | 2236 | 0 | 100 |
| 1.9. Other non-operating expenses | 2748 | 2748 | 0 | 100 |
| 1.10 Profit before tax | 3 855 | 7 592 | 3 737 | 197 |
| 1.11 Income tax | 1196 | 1822 | 626 | 152 |
| 1.12 Net Income | 2 659 | 5 770 | 3 111 | 217 |
In 2008, it is planned to increase the net profit by 3111 thousand rubles, i.e. the planned increase in comparison with 2007 will be 2 times.
A positive impact on the growth of net profit is primarily provided by a higher increase in sales revenue compared to an increase in cost. In general, in the planning period, a significant improvement in the financial performance of the enterprise is expected, however, a high profit margin is included in the budget of the enterprise, and in the market conditions the company bears various risks that may have a negative impact on the activities of the enterprise. In this case, Navarros LLC has high risks of underperforming the budget. Next and the final stage budgeting LLC "Navarros" is the preparation of the forecast balance sheet. The calculation results are presented in table. 3.12
Table 3.12
Forecasted balance sheet of Navarros LLC for 2008
| ASSETS | At the beginning of the reporting period | At the end of the reporting period |
| I. NON-CURRENT ASSETS | ||
| Intangible assets | 262 | 210 |
| buildings, machinery and equipment | 15546 | 14606 |
| Construction in progress | 1524 | 1524 |
| Long-term financial investments | 1452 | 1452 |
| Total for Section I | 18784 | 17792 |
| ASSETS | ||
| 2. CURRENT ASSETS | ||
| Stocks | 9394 | 13898 |
| Accounts receivable (expected to be paid within 12 months after the reporting date) | 7032 | 10152 |
| Short-term financial investments | 359 | 359 |
| Cash | 913 | 913 |
| Total for Section II | 17841 | 25322 |
| BALANCE | 36625 | 43114 |
| PASSIVE | ||
| III. CAPITAL AND RESERVES | ||
| Authorized capital | 826 | 826 |
| Extra capital | 13828 | 13828 |
| Reserve capital | 186 | 186 |
| Social funds | 1176 | |
| Retained earnings of previous years | 1426 | 3 231 |
| Uncovered loss of previous years | ||
| Retained earnings of the reporting year | 2659 | 5 770 |
| Total for Section III | 20101 | 23 841 |
| IV. LONG TERM DUTIES | ||
| Borrowed funds | 600 | 430 |
| Total for Section IV | 600 | 430 |
| V. SHORT-TERM OBLIGATIONS | ||
| Borrowed funds | 4200 | 3999 |
| Accounts payable | 11724 | 14 844 |
| including: suppliers and contractors | 6132 | 9 252 |
| debt to the organization's personnel | 1302 | 1302 |
| indebtedness to state extra-budgetary funds | 959 | 959 |
| arrears to the budget | 1442 | 1442 |
| advances received | 1611 | 1611 |
| other creditors | 278 | 278 |
| Total for Section V " | 15924 | 18 843 |
| BALANCE | 36625 | 43 114 |
In the planning period at the end of the year, compared with the beginning of the year, the balance sheet currency is expected to increase by 6489 thousand rubles. The growth of inventory and own funds is of great importance for the restaurant. In conclusion, the calculation and analysis of financial indicators is carried out in order to assess the rate of change in financial indicators in the planning period.
Let's calculate the liquidity indicators in 2008.
Table 3.13
Forecast of liquidity indicators of Navarros LLC in 2008
| Indicators | In 2007 | In 2008 (plan) | Deviation (+, -) |
| Cash, thousand rubles | 913 | 913 | 0 |
| Short-term financial investments, thousand rubles | 359 | 359 | 0 |
| Total most liquid assets, thousand rubles | 1272 | 1272 | 0 |
| Quick sale assets (short-term receivables), thousand rubles | 7032 | 10152 | 3120 |
| Total of the most liquid and quickly sold assets, thousand rubles | 8304 | 11424 | 3120 |
| Slowly traded assets (inventory, VAT), thousand rubles | 9537 | 13898 | 4361 |
| Total liquid assets, thousand rubles | 17841 | 25322 | 7481 |
| Short-term debt obligations, thousand rubles | 15 924 | 18 843 | 2919 |
| Absolute liquidity ratio (Cal) | 0,08 | 0,07 | -0,01 |
| Critical liquidity ratio (Kcl) | 0,52 | 0,61 | 0,09 |
| Current liquidity ratio (Ktl) | 1,12 | 1,34 | 0,22 |
According to the table. 3.13 the absolute liquidity ratio in the planning period of 2008 will slightly decrease, however, the critical liquidity ratio and the current liquidity ratio will increase, which indicates the liquidity and reliability of the organization's business.
In general, the use of the budgeting system in Navarros LLC is a justified way of financial planning of the enterprise. Using the budgeting system of Navarros LLC to proceed to the development of a long-term program for the development of the enterprise, which will allow obtaining additional competitive advantages in the market.
The calculated data are distributed among departments for implementation and control.
3.3 Methodological approaches to improving the budgeting system at small businesses
Budgeting is currently very popular, since this system is used both in Russia and abroad.
The use of budgeting as a quality tool of the modern management system of Navarros LLC should ensure:
1) increasing the efficiency of financial and economic activities (growth of economic indicators) primarily by reducing costs;
2) improvement of management efficiency (growth of quality indicators - transparency, manageability, flexibility, etc.).
The main problem of the budgeting system is the risk of accepting an incompletely calculated budget, as well as for quarterly reporting, which means an analysis of the results for every three months and a more frequent revision of forecasts.
All these factors raise one important question - "How can the budget planning process be optimized so that it becomes possible to plan, revise forecasts and stimulate management in the shortest possible time."
As an approach to improving the budgeting system of Navarros LLC, it is necessary to divide the requirements for business management into four relevant areas, creating appropriate structures for them.
1. Forecasting;
2. Determination of the direction of development of LLC "Navarros";
3. Management of the company's value;
4. Control over financial expenses.
Forecasts are made centrally based on a financial model that receives data from sources inside and outside the company.
The direction of development of the budgeting system is developed using a system of interrelated balanced indicators that determine the financial and non-material goals of commercial activities. Cost management is done through analysis competitive environment(benchmarking) industry and best-in-class companies - in the interest of performing ancillary functions such as managing labor and financial resources... This allows you to set goals based on comparison with other organizations, which is much preferable to comparison with your own performance in the previous year.
In such a case, Navarros LLC will focus its efforts to reduce the cost on achieving a competitive advantage. Finally, control over the expenditure of funds is carried out by a special department, which meets once a month and sets priorities in the dynamics of income.
LLC "Navarros" has been successfully operating for several years, constantly improving its position. However, not all companies can complete a complete overhaul of their budget planning systems. Having studied the activities of Navarros LLC and other companies, it is necessary to implement the following measures to improve the budgeting process.
1. It is necessary to separate the implementation of the budget and the process of bonuses. So, according to the results of work for the last year, I paid bonuses for the implementation of the financial plan. This creates problems in setting goals, as employees strive for guaranteed bonuses, while management wants more meaningful indicators. From this, of course, it does not follow that there is no need to pay cash incentives based on the results of financial activities. One of the solutions here may be the payment of bonuses based on the direct profitability of the company (without taking into account the achievement of the set goal).
Another solution is when bonuses are calculated based on performance in comparison with direct competitors, which also removes the problem of achieving goals.
2. It is necessary to separate budgeting and forecasting. The budget is unambiguously related to the allocation of resources, which requires internal management and analysis. Forecasts can be based on financial models, change every month, quarter or according to circumstances.
3. Apply external benchmarking to set cost control targets. This will allow you to focus on realistic goals, taking into account the opportunities for promotion in a competitive environment. In addition, the use of external benchmarking allows you to get quality services at affordable prices.
4. Determine the course of development using financial and non-financial indicators of performance, since financial goals are easy to manipulate, because you can improve your financial situation in a short time by reducing the quality of service and the level of competitiveness. By focusing on the main non-financial indicators, you can avoid this situation.
5. Make a clear link between core non-financial activities and financial performance, clearly tracking changes in their ratio. It is no secret that many of the improved performance indicators of the financial plan are due to cuts in individual budget items, made without taking into account the real impact of such a step. Unsurprisingly, the seemingly anticipated savings were not achieved. Only by realizing what opportunities for development are provided by the use of statistical control methods, it is possible to judge with complete confidence about future achievements. Over time, the planned optimization of the development process will undoubtedly help to improve the organization's performance, but such progress requires planning and management. By tying together the production plan, development plan and financial plan, you can get a sound and perfect budget. To achieve this, LLC "Navarros" can only through the introduction of a specialized software allowing to coordinate these processes.
6. Separate operating expenses and capital expenditures. At first glance, this is obvious and is the basic principle of the work of financiers, but many organizations ignore the immutable fact that they must make at least small improvements every year in order to simply remain competitive. When a business is booming, these small items of expense dissolve into recurrent costs and may not even be noticed. Unfortunately, when budgets are tight, these "optional" costs can be easily cut back. The business may seem profitable, but in fact, its competitive strength is gradually being lost, so an approach is reasonable, which consists in a clear delineation of the named expenditure items in order to control and monitor them.
Thus, we can conclude that in order to build an effective budgeting system in Navarros LLC it is necessary to carry out serious work in the field of budgeting.
To begin with, the budgetary process at the enterprise must be studied as thoroughly as possible, and a budgeting system must be created that fully meets their needs and operating conditions, which, as a result, will provide a competitive advantage.
Improving the planning system is to ensure end-to-end communication between planning horizons - from strategic planning(usually for several years) to tactical (for a year, quarter) and operational (for a month, week). Of course, for Navarros LLC, depending on the time, the planning horizons have their own range, but their relationship must be ensured.
In addition, it is also required to improve the system for determining the cost of production and the system of rationing (standard prices, consumption ratios, standards of working capital).
Organization of control over the implementation of plans involves the collection and consolidation of information on the actual implementation of planned budget indicators, identification of deviations "plan-fact", analysis of the reasons for deviations and management decisions. To ensure the effectiveness of management, deviation standards are determined: emergency, excess, permissible, and control of each deviation range is delegated to the appropriate level of enterprise management.
Improving the management reporting system is aimed at monitoring and analyzing the activities of the responsibility centers and the entire company as a whole. Reports and accompanying explanatory notes must contain the deviation "plan-fact", factor analysis (change in price, volume), explanations of the deviations that have arisen, a list of necessary management influences and ways to implement them.
Improvement of the existing system of financial and economic management should include:
· Identification of the specifics of the company's activities and the development of a unique budgeting system, adapted to the company and taking into account the specifics of its business;
· Implementation of constant changes (including refraction of old stereotypes and ineffective working methods) during the performance of all work (Change management);
· Given the relatively long term for the development and implementation of the budgeting system (from 4 months to a year or more), constant adjustment of the results is required, since during this period the company itself changes;
· Training the company's employees in new methods and technologies of work, training a team of specialists from among the company's employees who can not only maintain the system's performance, but also develop it after implementation - this is the key to the successful operation of the budget management system.
After the improvement of planning and accounting methods, the formation of end-to-end regulations for the interaction of departments in the planning and control process; development of forms of plans and budgets and forms of management reporting; formation of all regulatory documents necessary for the full functioning of the budgeting system.
In a market environment, planning and control are important functions of financial management. In practice, budget systems are widespread, which include planned and reporting data. A budget is a quantitative expression of a plan, a tool for coordinating and monitoring its implementation on a short-term basis.
The practical significance of the thesis is based on the stages:
· Procedures for the formation of operating and financial budgets;
· Analysis of the financial condition of the organization;
· A mechanism for monitoring and analyzing the execution of budgets.
When developing forecast data, budgeting principles should be observed and economic and statistical methods should be used.
Budgeting - modern technology financial management, which allows not only to get a reasonable operational calculation, but also to organize the management of the enterprise on the basis of a budget - plan, to strengthen control over costs and cash flows, to achieve better financial results.
The system of budgets forms the budgetary structure, in accordance with which the main final budgets of the organization are formed: the budget of income and expenses, the budget of cash flows, the budget of the balance sheet.
A prerequisite for budgeting is the delegation of financial decision-making to the centers of financial responsibility (CFR).
Course work was carried out on the materials of "Navarros" Ltd. The main activity of the company is the restaurant business.
The main source of income for the organization is sales of restaurant products. In 2008, the growth in sales of products is planned in the amount of 138% or 10,433 thousand rubles.
It is planned to increase the growth of sales of dishes by 123% or 859 rubles in comparison with 2007. Revenues from offsite services in 2008 are planned at the level of 4176 thousand rudders, which is 122% more than in 2007.
In general, the growth of income of OOO Navarros in 2008 is planned at a rate of 135%. The use of the budgeting system in Navarros LLC is a justified way of financial planning of the enterprise. Using the budgeting system of LLC "Navarros" to move on to the development of an enterprise development program, which will provide additional competitive advantages in the market.
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Fundamentals of Implementation of Performance-Based Budgeting Methods in the Treasury System of Budget Execution / [A. S. Barakhovsky, A. V. Busarova, E. E. Vaksova and others]; Research Center budget. relationships. - M .: URSS, print. 2006.- 261 p.
Tsitovich N.N. Budgeting at Russian enterprises // Bulletin of St. Petersburg University. No. 1, 2004.
Aniskin Yu.P. Financial activity and company value: planning aspects / Yu. P. Aniskin, A. F. Sergeev, M. A. Revyakina; ed. Yu. P. Aniskina; Moscow state in-t electron. technology (tech. un-t) [and others]. - M .: Omega-L, 2005. - 237 p.
Amanzholova B.A. Budgeting as a system of operational planning and control / B. A. Amanzholova; Tsentrosoyuz Ros. Federation, Sib. un-t consumer. co-op .. - Novosibirsk: SibUPK, 2006. - 143 p.
Ermakova N.A. Budgeting in the management accounting system / N. A. Ermakova. - M .: Economist, 2006. - 187 p.
Dugelny A.P. Enterprise budget management / A. P. Dugelny, V. F. Komarov. -. - M .: Delo, 2007.- 430, p.
Karpov A.E. A series of books "100% practical budgeting" / A. E. Karpov. - M. Kn. 1: Budgeting as a management tool. - 2005. - 392 p.
Concept, goals and objectives of budgeting.
The structure of management accounting for each organization is individual, depending on specific features: form of ownership, type of activity, organization of production. However, there are general issues methodology of management accounting in terms of implementation and improvement of the budgeting process.
The budget is a quantitative expression of targets, taking into account coordination and control. The budget can combine basic, financial and investment activities. Budgets can be drawn up both for the organization as a whole, and for each structural unit, a specific business process or business forecast.
Budgeting is a continuous cyclical process of budgeting, which allows you to match the organization's capabilities to market conditions, and monitor their implementation.
Budgeting allows you to solve the main management tasks:
Make a forecast of the production program;
Make a forecast of the financial condition of the organization;
Conduct a comparative analysis of planned and actual data;
Assess and analyze the identified deviations.
In general, budgeting in a commercial organization has the following main goals:
Forecasting financial results of economic activity, financial solvency certain types activities and resource cost limits;
Determination of the most preferable business projects for the further development of the organization, economic justification business projects, as well as decisions on the levels of their financing from internal and external sources;
Analysis of the performance of various structural units, control over the correctness of decisions made by the heads of structural units.
Currently, budgeting contributes to obtaining competitive advantages as a result of the formation of an effective resource and cost management system, and the use of planning for future actions based on internal reporting forms. The introduction of budgeting into the practice of Russian organizations makes it possible to create an integral and effective management system.
In the management accounting system, information is formed, on the basis of which the heads of the organization make decisions, primarily in terms of the cost structure and expected economic results of activity. The rules for maintaining management accounting are not regulated by legislative and regulatory acts, therefore budgeting, as part of management accounting, is internal affairs organizations.
Budgeting in our country was introduced even during the planned economy. However, it was not an effective outline, since normative indicators and standards were developed for all organizations, without taking into account individual characteristics. This fact did not allow making management decisions on reducing costs and developing strategic development goals for a particular economic entity.
The introduction of a modern budgeting system is carried out by decision of the organization's management. If this decision is made, it is necessary to assess the actual state of the organizational structure and management system, to identify its advantages and disadvantages. Determine the effectiveness of the activities of financial and economic services and accounting, from the point of view of the prompt presentation and completeness of processing management information for the purposes of operational management.
To set budgeting in an organization and ensure its effective functioning, it is necessary to carry out a number of activities:
Development of the structure of the general budget of the organization (includes an interconnected system of financial and operational budgets);
Designing a financial management structure;
Securing responsibility for budgets and their items (it is recommended to use matrix projections);
Development of budgetary policy (or a section in accounting policy), including methodological and organizational and technical issues;
Development of provisions and regulations of budgets;
Creation of a specialized structure and / or consolidation of the function of drawing up, agreeing, monitoring budget items for officials.
Budgeting issues in an organization can be dealt with by the financial directorate, led by the CFO. The financial directorate is either a separate structural unit, at the same level as the accounting department and the economic department. Or includes the listed services.
When executing budgets, it becomes possible to direct the activities of all departments to achieve the target financial result, highlighting areas of responsibility and distributing financial management functions among the heads of departments. The exchange of management information and the interaction of structural units with each other are improving.
CFO performs job duties specified in the job description. The main result of the activities of the financial directorate is the preparation of a budget forecast and systematization of the actual indicators grouped in the budget, and most importantly - the development of alternative options for the development of production, operational, financial and investment activities of the organization. Draft management decisions are presented to the management of the organization for adjustment and approval. After that, management decisions are subject to execution.
FEDERAL AGENCY OF EDUCATION OF THE RF
Belgorod Engineering and Economic Institute
Department of Economics, Marketing and Management
Course project
By discipline: budgeting
On the topic of: "Organization of budgeting"
Completed: st-ka gr. EKB-55
Leader: G.Z. Akimova
Belgorod 2005
1. Theoretical part: business organization ……………… 3
2. Task ……………………………………………………… .25
Introduction.
Budgeting- it is a system of short-term planning, accounting and control of resources and results of activities of a commercial organization by centers of responsibility and / or business segments, allowing to analyze the predicted and received economic indicators in order to manage business processes.
The enterprise budget (Main budget) is a system of interconnected budgets and in a structured form describes the expectations of managers regarding sales, expenses and other business transactions in the planning period. It includes two main blocks: a system of operating budgets (planned estimates of the main business processes) and a system of financial budgets. Accordingly, from the point of view of the sequence of preparation of documents, the budgeting process can be conditionally divided into two main parts, each of which is a complete planning stage: 1) preparation of operational budgets, 2) preparation of financial budgets.
Organization of budgeting allows you to coordinate the activities of departments within the company and subordinate it to a common strategic goal. Budgets cover all aspects of economic activity and include planned and reporting (actual) data.
The budgets reflect the goals and objectives of the company. Therefore, in the budgeting process, current control is provided over decisions and procedures to achieve the planned financial indicators as a result of the formation, distribution and use of the company's economic assets at all stages of its creation, activities, reorganization and liquidation, as well as as a result of the formation and change of cost estimates and proportions of assets. and liabilities of the company.
The purpose and objective of budgeting.
Intercompany financial planning involves the use of different budgets. Budgeting is an integral part of financial management.
Budgeting is the process of developing and forming planned budgets that combine the plans of the company's management and, first of all, production, marketing and financial plans. Budgets are a tool for financial planning (forecasting), and control over the activities of the company and its structural divisions.
To organize budgeting, the main tasks must be solved:
Establishment of budgeting objects;
Development of a system of budgets - operational and financial;
Calculation of the corresponding budget indicators;
Calculation of the required amount of monetary resources to ensure financial stability, solvency and liquidity of the balance sheet of the enterprise;
Calculation of the amount of internal and external financing, you
the phenomenon of reserves for their additional attraction;
Forecast of income, expenses and capital of the enterprise.
In the general system of budgets, the main (consolidated) and local budgets are distinguished.
Basic budget is a financial, quantitatively defined expression of marketing and production plans necessary to achieve the set goals.
Localbudgets serve as the initial information base for the preparation of the main budget.
The main reason why an enterprise loses a significant part of its income without making up the main budget is the lack of reliable information about their customers and sales markets. As a result, it becomes difficult to predict the real volume of production and sales of products (services).
From the point of view of optimizing income, it is important not only to correctly draw up the main budget for the coming period (month, quarter, year), but also to systematically monitor its implementation, which helps to minimize unforeseen financial losses. Such control involves identifying the size of deviations of the actual indicators from the planned ones fixed in the budget, and taking prompt measures to eliminate them. Determination of deviations, and hence control, must be carried out based on the budgeting horizon: in the monthly budget - weekly; quarterly - monthly; in the annual budget - quarterly. Control is inherent in budgeting. During the control process, they collect necessary information and analyze the results of budget execution.
The budgeting process is continuous, or rolling. Based on the planned financial indicators established for the year, during the current financial planning (before the planning period) develop a system of quarterly budgets. Within the quarterly budgets, monthly budgets are drawn up. This rolling budgeting guarantees the continuity of operational financial planning in the enterprise.
The main idea of the budgeting system is that the key parameters economic activity enterprises specify at the level of its individual structural divisions (branches) according to information on the types of income and expenses. To do this, create the appropriate centers of responsibility: income, expenses, profits and investments. The center of responsibility is a set of budget items of an enterprise (united on a common basis), for the planning and implementation of which one of the leading managers of the enterprise or the head of a structural unit is responsible. As part of the budgeting process, the head of the responsibility center is responsible for:
Organization of planning and rationing of the set of articles entrusted to him;
Correct planning of the relevant budget items;
Control over the implementation of the planned parameters of budget items;
Making decisions on elimination of rejection of planned items
budget from the actual parameters (if such deviations
exceed 5%).
Compared to other financial planning and enterprise management tools, budgeting has a number of obvious advantages 1:
Plans the activities of the enterprise as a whole by coordinating the work of leading specialists of departments and services;
Has a positive effect on motivation and attitude
team;
Allows you to improve the resource allocation process;
Helps grassroots managers understand their role in the enterprise;
Monthly planning of budgets of structural divisions provides users with more real information on the volume of income and expenses than accounting and statistical reporting;
Within the framework of the approved monthly budgets, the structural divisions of the enterprise are given greater independence in the use of funds;
Minimizing the number of budget indicators allows you to reduce
financial and economic staff time expenditures
enterprise services;
Allows more efficient use of monetary resources
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1. [source # 3]
enterprises, which is especially important in conditions of a shortage of cash;
Serves as a tool for comparing achieved and desired results.
It should be borne in mind that when introducing a budgeting system, an enterprise may encounter certain difficulties:
High costs for the development and implementation of this system;
Conflicts between managers of structural divisions and
specialists of financial and economic services;
Striving to get more resources for successful implementation
budget;
Dissemination of inaccurate information about budgets through informal channels, etc.
However, these difficulties are not of an objective nature and are quite surmountable in the process of implementation. new system financial management and control. Consequently, the budgeting system helps managers and leading specialists of enterprises to more effectively manage the production and commercial process, especially in the face of a shortage of funds. Comparing the actual results with the parameters of budgets, it is possible to establish which expenses require special control and due to what factors it is possible to increase the company's income.
The role of budgets in making financial decisions.
The role of budgets in financial management and decision making is determined by the following aspects:
Assistance in planning business operations;
Coordination in the activities of various divisions of the enterprise and ensuring the harmony of their development;
The need to communicate plans to the heads of various
responsibility centers;
Stimulation (motivation) of the work of managers (leading
managers) to achieve the goals of the enterprise;
Evaluation of the effectiveness of the work of managers and specialists.
Let's consider these aspects in more detail.
Making key decisions on planning business operations is an integral part of the long-term planning process. The process of drawing up an annual budget involves its specification in a quarterly (monthly) breakdown of indicators. If there is no annual budget, the problems of day-to-day operations can lead the manager to abandon planning for future operations.
The preparation of the annual budget assumes that managers will plan future operations, taking into account possible changes in the operating conditions of the enterprise in the next year and take measures to neutralize future negative phenomena. The budgeting process forces managers to anticipate problems before they arise, and ensures against ill-conceived, hasty decisions that pose a threat to the enterprise.
With the help of budgets, the activities of different departments can be aligned and consolidated. In the absence of general management, each manager can make his own decision, believing that it is in the best interests of the business entity. In some cases, the interests of one manager may conflict with the interests of other leading specialists of departments and services.
Thus, budgeting forces managers to study the relationship of their unit with others and, in the process of this study, anticipate and resolve possible conflicts. It is problematic that the first version of the draft budget will ensure the harmonization of all areas of the enterprise's activities.
A well-designed budget promotes coordination different types activities of the enterprise and ensures the consistency of actions of all its structural divisions. The budget can be a useful tool for influencing the performance of managers, encouraging them to act towards achieving main goal enterprises.
The budget expresses those parameters (income, expenses, profit, etc.), in the achievement of which, when certain conditions heads of departments (branches) may be interested. However, budgets can lead to inefficiencies and tensions between leaders.
If the employees of the enterprise took an active part in the development of budgets and if managers always turn to them for help in managing departments and services, then they can stimulate their effective work. However, if the budget is dictated from above and is rather an order, then its implementation can cause opposition from staff and do more harm than good.
The budget assists managers in managing and controlling activities in the division of the enterprise for which they are responsible.
By comparing actual results against targets for various types of expenditures, managers can determine which ones are not meeting the original plan and therefore require their close attention. This process allows you to establish a system of cost control by deviations, when the manager's efforts are concentrated on indicators that significantly exceed the budget values.
In investigating the reasons for the rejection, managers should be aware of such shortcomings as the procurement of poor quality materials, the mandatory observance of the installation standard and the transit shipment rate. The performance of a supervisor is often judged by the post's success in budget execution. Some firms remunerate their employees based on their ability to achieve targets set in a tight budget, or set their promotions against budget execution. In addition, the leader can assess his own abilities.
The budget is a useful tool for communicating to managers how effectively they are meeting their responsibilities in meeting the objectives of the plan. A firm will function effectively only with complete and reliable information. This is necessary so that the divisions of the enterprise have a real idea of its plans and economic policy.
Each employee must clearly understand his role in budget execution, which ensures his personal responsibility for meeting planned targets. By using the budget, senior management communicates its intentions to lower-level managers so that all employees clearly understand these intentions and coordinate their actions. Information is transmitted not only through the budget, a lot of vital information comes in the process of its preparation. Budgeting and execution procedures serve several purposes, some of which may conflict with one another.
The budgeting system at any enterprise consists of two key subsystems:
The budgets of structural divisions, compiled by responsibility centers (financial accounting centers);
Cross-cutting (consolidated) budget characterizing activities
the enterprise as a whole.
The budgeting system is also subdivided into operating and financial budgets.
The operating budget includes the budget of income and expenses, the basis for the development of which are more private budgets: production; product sales; other income; material and energy costs; wages; depreciation charges; general production and general expenses; tax, etc.
The financial budget consists of a cash flow budget and a projected balance sheet of assets and liabilities (balance sheet budget).
Budgeting income and expenses is the starting point of the end-to-end budgeting process in any enterprise. This budget is an estimated estimate of income and expenses, as well as their structure for the coming period. The income and expenditures of the budget are calculated separately, and then compiled into a single table. The revenue side of the budget is divided into three components:
1) income from the sale of products;
2) income from other current activities;
3) income from financial activities.
The consumable part consists of running costs related to the production and marketing of products; expenses for paying taxes; expenses for financial activities.
It should be noted that the revision of the income and expenditure budget is possible in the following cases:
Its deficit (excess of expenses over income);
If planned profitability sales and equity
is, in the opinion of management, at an insufficient level (the ratio of budget surplus to sales volume and equity), which does not allow to fully realize the effect of financial leverage.
The concentration of all types of planned cash flows is reflected in a special financial document - the cash flow budget. The cash flow budget is made up in several stages:
♦ the budget of proceeds from the sale of products (it is necessary
also to develop a budget for income and expenses);
♦ other income budget;
♦ budget for procurement of materials;
♦ budget of payments for wages;
♦ budget of payments for general production expenses;
♦ budget of payments for general business expenses;
♦ budget of tax payments (including indirect taxes);
♦ budget of payments for financial activities;
♦ consolidated cash flow budget.
Conditions for creating a system of effectivebudgetary management.
The budgeting process at many enterprises proceeds in conditions of economic instability and the absence of clear development prospects 1.
First of all, this process must have organizational, informational and personnel support, as well as the ability to quickly conduct analytical procedures (quick collection and analysis of the collected data), for which the company's specialists spend a lot of time.
The most characteristic drawback of the budgets being drawn up is the weak involvement of specific performers in the process of budgeting and management (decision-making), the complexity of the formation of a flexible system for assessing the performance of structural units (workshops, departments, services, etc.).
The main problems of budgeting:
The concept of management is not clearly defined;
There is no management (production) accounting;
The basis for budgeting is the actual accounting data;
1. [source # 5]
Accounting, analysis, planning and control procedures are not formalized, responsibility is not delineated officials;
The principles of centralization and decentralization are not defined.
Consequently, for the successful formation and functioning of the budget management system, a number of prerequisites must be met.
1. It is advisable to create a new organizational structure for enterprise management, defining the rights and responsibilities
heads of departments, as well as the structure of business processes that affect the speed and quality of internal planning.
2. Integration of budgeting with organizational and
information structures of the enterprise and the system for the execution of business processes (production of goods). The most preferable approach is when the organizational structure is consolidated in accordance with the goals and objectives of the enterprise, as well as the situation in the external environment. After that, the rules for the movement of information (documents,
registers, reports, etc.), which reflects the results of the enterprise as a whole and its divisions (branches).
3. For successful planning, it is advisable to standardize credentials in order to sharing all structural divisions (business centers, responsibility centers, etc.).
For these purposes, it is necessary to develop the following internal regulatory documents:
Regulation on the conversion and consolidation of accounting data;
Tax accounting chart of accounts;
Regulation on the formation of tax reporting;
Regulation on the system of management accounting and reporting;
Classifier of the primary elements of production logistics, identified in time and space;
Classifier of primary planning and accounting units of budgetary management, etc.
4. It is necessary to clearly structure all processes, the distribution of functions and responsibilities of specific individuals for the results of economic activities of structural units. Compliance with this condition allows you to automate all the operations necessary for this and greatly simplify the budgeting system.
5. The introduction of budgeting should be based on high-quality financial analysis, forecasting market trends, taking into account the factors affecting the sale of products, and, consequently, on financial results. For these purposes, it is necessary to carry out the following work:
Compile a set of analytical indicators for departments;
Ensure their comparability in time and space;
Define a set of standard analytic forms.
6. The introduction of budgeting is accompanied by the development of accounting policies (selection of financial accounting centers (FSC), accounting systems, typology of accounting entries that can be used to describe business situations, information consolidation procedures and determine financial results). In order for the accounting data to be suitable for financial analysis and control, they must be supplemented by a management accounting system, which will make it possible to reliably distribute costs across the DFS, business processes, etc.
7. Ultimately, the final budget management outline should include:
Formulation of the goals and objectives of the enterprise;
Financial planning and control over the implementation of plans;
Accounting and control of results;
Calculation of parameters for the analysis of deviations from the plan;
Decision-making on the regulation of deviations (preservation
positive deviations and elimination of negative ones).
In any case, the management of the enterprise faces a difficult task: to competently introduce budget management systems, while simultaneously solving two problems - organizational and technical. A prerequisite for the formation of a budgeting system is the development of regulations that determine the sequence of budgeting, since each of them requires not only coordination with adjacent budgets, but also with other functions of enterprise management.
Budgeting period.
Preparations for developing budgets for next year should begin several months before the start of this year. If the budget is based on a calendar year, then it is advisable to start preliminary development from October 1. The budget can cover any time period. However, the larger the time lag the budget expresses, the less reliable it is. A short-term budget (within a calendar year) is more reliable and reflects the content of operational plans and tactical actions of the enterprise.
The budgeting period depends on the tactical tasks and the need to apply budgeting to solve them. It depends on the objects of production and sales, technology and production cycle, the reliability of data on the range of products, seasonality, inventory turnover, availability of resources (material, labor and financial), the level of entrepreneurial risk and state regulation(tax rates, rates of contributions to off-budget funds, discount rate of bank interest, etc.).
Seasonal fluctuations arise under the influence of a number of objective factors (climatic conditions, the possibility of transporting raw materials and materials, supply of energy resources, etc.) and can significantly affect customer demand, supply of material resources and the state of stocks at the enterprise.
A detailed budget for each structural unit (branch, center of responsibility, etc.) is usually developed for a certain period. The annual budget can be divided into twelve months. It can also be distributed monthly for the first three months and quarterly for the remaining nine months. During the year, quarterly budgets are divided into monthly ones. The last of them can be detailed by decades and five days. For example, during the first quarter, as new information becomes available, the budgets for the next three quarters may be changed and a plan for the first quarter of next year will be prepared.
This process is called continuous, or rolling, budgeting, which ensures that there is a twelve-month budget, to which the budget for the coming quarter is added as soon as the previous quarter's budget expires. During the year, the period for which the budget is drawn up will be reduced, and so on until the budget for the next year is drawn up.
So rolling budgets ensure that planning continues — not a one-time event that happens once a year, but a sequential process where leaders feel the need to look ahead and rethink their plans for the future.
Moreover, it is likely that actual results will be compared to more realistic targets as operating budgets are systematically reviewed and adjusted.
Since budgets are revised at the end of each quarter or month, there is a danger that managers will not pay enough attention to preparing budgets for the next period because they know that they may change during the quarterly revision process. However, this negative factor is blocked by the need to comply with the job descriptions of the instructions at each enterprise, which is provided for in the relevant provisions on budget management.
Continuity of budgeting is largely ensured through the use of various computer technologies. They help you quickly and accurately make financial calculations, make the necessary comparisons and constantly track the results of deviations from plans. Modeling various situations, the leader (manager) chooses the best course of action from a set of alternatives. If he is not satisfied with the performance indicators, then he has the right to change his decisions and attitudes. There is also dedicated budgeting software.
Budget development technology.
The budget is a highly effective tool for intra-firm financial planning and allows you to quickly coordinate and evaluate the activities of structural divisions of the enterprise.
The budget begins the process of setting specific objectives for commercial activities. Deviations from targets in the process of executing short-term budgets serve as a signal to managers to take effective measures to eliminate negative deviations. Financial management procedures include: budgeting, attraction borrowed money and placement of temporarily free cash resources on the financial market. In relation to budgeting, the last two procedures are subordinate. This is due to the fact that without clear management and control over cash flows within the enterprise, actions to attract and place funds may be ineffective and will not lead to strengthening the financial stability and solvency of the business entity. The budgeting process should be standardized using budget forms, instructions and procedures developed by the enterprise itself.
During the initial budget preparation phase, the management of the budgeting process usually begins with the appointment of a budget director. He is responsible for the preparatory process, standardizing planning forms, collecting and analyzing data, checking information and submitting reports. The CFO is usually the CFO (vice president of economics and finance). He acts as a full-time expert and coordinates the activities of departments and services.
The Budget Committee is a senior management advisory group that may include external consultants. This committee is a permanent body that thoroughly reviews strategic and financial plans, makes recommendations, resolves disagreements and promptly makes adjustments to the activities of the enterprise.
The budget manual is a set of instructions and regulations that reflect the policy, organizational structure of the enterprise, the distribution of rights, duties and responsibilities of performers. These instructions serve as a set of rules and recommendations for the development of budget programs.
Initially, managers responsible for meeting targets are required to prepare budgets for the areas of activity for which they are responsible. The budget preparation process should be done from the bottom up. This means that the budget begins to be drawn up at the lowest level of management, and to improve and coordinate at a higher level.
This approach helps the heads of departments (centers of responsibility) to be involved in preparing their budgets and the likelihood that they will strive to achieve the planned goals. There is no unambiguous method for quantifying a specific budget line item. The reported data can be used as a starting point for budgeting, but this does not mean that it is developed on the assumption that if the event took place in the past, then it will occur in the future.
It is advisable to accept changes in conditions in the future, and information about the past can be useful in future work. In addition, managers can follow the direction of senior management in setting their budgets. For example, special instructions for changing prices for purchased materials and services. V production activities you can focus on standard costs as the basis for calculating the cost of production, provided in the budget. When preparing budgets, managers should consider the following factors:
The type of products and services;
The number of workers employed and their qualifications;
Production opportunities and capacity constraints;
Stability of the production cycle;
prices for purchased material resources and energy;
Sales prices for finished products (services);
Availability of production stocks and the need for their replenishment;
The rate of turnover of current assets (for example, accounts receivable);
Cyclicity of production;
Technological aspects, including the presence of physically and morally worn out equipment;
Product quality control and service capabilities;
Market conditions;
Funding needs, etc.
When developing a budget, it should be borne in mind that a well-written planning document has the following properties:
Has forecasting capabilities ;
Has clear channels of information flow, distribution of powers and responsibilities;
Contains clear, detailed and reliable information on the activities of the subdivision (branch);
Provides opportunities for historical comparison of indicators;
Supported by all stakeholders within the enterprise and, above all, by its management.
At the stage of discussing the budget with the higher management, the heads of departments are required not only to draw up their budgets, but also to submit them for approval to the higher manager. He, in turn, unites all budgets, for which he is responsible and becomes responsible for budgeting at his level. Budgeting technology can be represented as a chain of sequential actions.
1) setting goals and strategies to achieve them from top to bottom;
2) preparation of the budget in ascending order - from the bottom up;
3) approval of the prepared budgets, again descending from top management to heads of departments.
A clear delineation of the functions and responsibilities of managers of structural divisions of the enterprise is of great importance in preparing budgets. For example, a purchasing manager plans purchases in physical and value terms. Purchases can be planned in the context of individual suppliers. The production manager projects the future production costs of a product and the cost of a single product. He is obliged to draw up a production schedule in order to manufacturing process was not interrupted. The production manager is responsible for the quality of manufactured products, increase (decrease) in production volumes, finding the optimal mode for organizing work, operation, repair and replacement of equipment. He is also obliged to determine the acceptable level of marriage on the basis of practical experience of the past. The quality manager assesses the quality of products, identifies the reasons for the decline in product quality and forms requirements for quality control. The sales manager projects future sales of goods and services, selling prices and profits, taking into account market segments and customers. He must also calculate the corresponding costs: labor costs, commissions to intermediaries, nor the promotion and transportation of goods, hospitality, etc. bad debt of buyers. He must wait for an increase in sales and, at the same time, for a decrease in overdue receivables.
After bringing all the budgets in line with the requirements of the financial, pricing, supply and sales policy of the enterprise, it is necessary to bring them into one budget and submit them to the top management for approval. Budgets are preliminarily discussed by the executive and their immediate supervisors and after the removal of controversial issues should be adopted by both parties. Therefore, the indicators included in the budget are the result of a discussion between the persons responsible for the given budget and its manager. It appears important aspect so that the budget planners participate in the adoption of its final version, and the manager does not revise the articles of this document without taking into account the argument of subordinates.
Care should also be taken to ensure that those in charge of budgeting do not deliberately try to get easy targets or understate budget targets in the hope that meeting the final budget is an easy target.
Discussion - very important process preparation of the budget, and during this process it can be determined whether it will be a truly effective management tool or just a technique. If the business unit leader (center of responsibility) is successful in building trust with his subordinates, then the negotiation process will make significant improvements in budget preparation.
At the stage of coordination and analysis of the reviewed budgets, the following work is carried out. As the budget moves from bottom to top - from a lower-level leader to a higher-level one - it is advisable to study the parameters of the budget during the discussion. Such examination may indicate that some budgets are out of balance with other budgets and need major adjustments. At the same time, other conditions, restrictions and plans must be taken into account, which the head of the department does not know about or cannot influence them.
So, it is advisable to start budgeting with the development of operating budgets - first of all, with the sales budget. On the basis of this planning document, budgets for production, procurement, operating, sales and other activities are formed. In parallel (or following the operational), the budget for the movement of funds (Cach - Flow) is compiled. It allows you to establish accounting and control over solvency and ensures the current financial stability of the enterprise.
The cash flow budget is the most local and requires a minimum of external information.
The final step is to develop an income and expense budget and a balance sheet budget. The first of them allows you to manage the most important financial result of the activity - profit, and the second expresses the obligations and investments of the enterprise by the main items of assets and liabilities.
Thus, the final result of the budgeting process is the development of three key budgets: the income and expenditure budget, the cash flow budget, and the balance sheet budget. They can be drawn up with a greater or lesser degree of detail, but the absence of one of them violates the complexity of financial planning in the enterprise.
Taking into account the risk factor in the budgeting process.
Any enterprise forms its budget in a specific period, which may be characterized by the uncertainty of the economic situation, the inevitability of risks. Therefore, in the process of budgeting, one can only assess risks and take measures to neutralize them. In the budgeting process, it is necessary to establish:
1) types of risks affecting budget execution (for example
budget of income and expenses);
2) a calculation algorithm that allows you to assess the level of risk;
3) calculate the probable damage (loss of part of income or profit
l) taking into account the chosen algorithm.
All types of risks are divided into predictable (from the point of view of economic theory and economic practice) and unpredictable (unforeseen), which are difficult to predict in advance; to external and internal. External risks are not directly related to the activities of the enterprise and are due to the state of the market situation, the development of inflationary processes in the country, the financial and monetary policy of the state. Internal risks are generated by the activities of the enterprise itself (for example, non-fulfillment of obligations by suppliers and buyers, unsatisfactory work with debtors, large financial investments in authorized capital other enterprises without a corresponding return from them, etc.).
In budgetary management, risks are classified into two groups:
1) the risk of loss of income;
2) the risk of an increase in the expenditure side of the budget, which leads to the loss of part of the profit.
In the process of assessing the possible size of financial losses from the execution of the budget of revenues and expenditures, absolute and relative indicators are used. The absolute amount of financial losses associated with commercial activities is the amount of loss (damage) caused to the company in connection with the occurrence of unfavorable circumstances.
To protect against commercial risk, the following standard methods are used:
1) risk aversion (rejection of dubious partners, search
guarantors, rejection of risky investment and innovative
projects, etc.);
2) localization of risks (creation of business centers for the implementation of risky projects);
3) diversification of activities and products, distribution of risks between production participants, a variety of suppliers and buyers, etc.;
4) compensation (creation of a system of material and financial
reserves, forecasting the external environment, etc.);
5) limiting - setting a limit, i.e. limit amounts
production and marketing costs.
Cash is an integral part of current assets. They are necessary for the enterprise to carry out settlements between suppliers and contractors, to make payments to the budget, settlements with credit institutions, to issue wages, bonuses and other types of payments to employees.
Funds come to the enterprise from buyers and customers for goods sold and services rendered, from banks in the form of loans, from institutions and organizations in the form of temporary assistance, etc.
The base of the enterprise's funds is the economic relations of the enterprise with various organizations and institutions and economic relations associated with the implementation of works, services and the implementation of other business operations.
One of the main conditions for the normal operation of the enterprise is the security of funds, which can be assessed by the analysis of cash flows.
The following cash flows are distinguished:
1. Cash flow from current activities
2. Cash flow from investment activities
3. Cash flow from financial activities
For any field of activity, cash flows reflect both cash inflows (cash inflows) and their expenditures (cash outflows).
The cash flow statement shows the effect of profitable activities on cash resources and on what assets are acquired and how they are financed. It helps to more clearly highlight the difference between net income and cash flow from business activities.
The main source of information for analyzing cash flows, the relationship with profit is the balance sheet (form No. 1), the income statement (form No. 2) and the cash flow statement (form No. 4), the content of which can be summarized by the following model :
d o + d + ∆ + d -∆ = d 1,
d o and d 1 - cash balances of the enterprise at the beginning and end of the reporting period;
d + ∆ and d -∆ - cash inflow and outflow for the period.
The structure of the cash flow can be represented in the appropriate models:
d + ∆ = d + ∆ tech + d + ∆ inv + d + ∆ fin,
d -∆ = d -∆ tech + d -∆ inv + d -∆ fin,
d + ∆ tek and d -∆ tek - receipt and expenditure of funds from current activities;
d + ∆ inv and d -∆ inv - receipt and expenditure of funds from investment activities;
d + ∆ fin and d -∆ fin - receipt and expenditure of funds from financial activities.
2003 year
d + ∆ = 117040 + 445 + 1590 + 89 + 20,000 = 139164 thousand rubles.
d -∆ = 125373 + 15 + 17000 = 142388 thousand rubles.
Balance at the beginning of the reporting period = 5269 thousand rubles.
5269 + 139164 - 142388 = 2045 thousand rubles.
The balance at the end of the reporting period is 2045 thousand rubles.
2004 year
d + ∆ = 219886 + 280 + 4575 + 56 + 8 + 290 + 57000 + 72153 = 354248 thousand rubles.
d -∆ = 234756 + 59000 + 59000 = 352756 thousand rubles.
Balance at the beginning of the reporting period = 2045 thousand rubles.
2045 + 354248 - 352756 = 3537 thousand rubles.
Table 2.2.
Indicator
2003, thousand rubles
Specific gravity,%
2004, thousand rubles
Specific gravity,%
Growth rate,%
Aggregate inflow for all types of activities
Aggregate inflow from current activities
Aggregate investment inflow
Aggregate inflow from financing activities
From table 2.2. it can be seen that in 2004 there was a significant increase in the inflow of funds from investment activities in relation to 2003. Cash inflows from other activities are also noticeable and significant. Proceeds from current activities account for the largest share in the total amount of cash inflows, the proportion of income from investment activities is also significant, in 2004 it amounted to 20.37%, an increase of 6% compared to 2003.
Table 2.3.
Indicator
2003, thousand rubles
Specific gravity,%
2004, thousand rubles
Specific gravity,%
Growth rate,%
Aggregate outflow across all types of activities
Aggregate outflow from current activities
Cumulative investment outflow
Aggregate outflow from financing activities
Analyzing table 2.3. the following conclusion can be drawn: the enterprise in 2004 provided loans to other organizations for an amount three times higher than the last year. The most significant cash outflow is observed at OJSC “Belgorodstoetal” from its current activities, but in 2004, despite the increase in this indicator in absolute terms, the share in the total outflow for all types of activities significantly decreased. In connection with the repayment of the loan amount, the outflow from financial activities increased.
Here are the indicators of the working capital and net assets of OJSC “Belgorodstroydetal”.
Table 2.5.
Indicators of working capital and net assets of OJSC Belgorodstroydetal, thousand rubles
Indicators
For the beginning of the year
At the end of the year
Changes
1 Total assets (excluding VAT)
2. Current assets
3. Current liabilities
4. Working capital (p2-p3)
5. Net assets (p1-p3)
6. Sales volume
7. Turnover of net assets,% (p6 / p5)
8. Operating profit (Revenue - Cost - Selling expenses - Administrative expenses)
9. Return on net assets,% (p8 / p5)
10. Equity capital
11. Net profit
12. Return on equity,%
Despite the increase in the value of net assets, in 2004 there was an acceleration of the turnover of net assets due to an increase in sales, and the profitability of net assets also increased significantly due to an increase in the amount of operating profit.
The effect of lending to the activities of the enterprise at the expense of the bank can be: positive, negative, or it will not be at all. The main criterion for assessing the effectiveness of financial leverage is the bank loan rate. If the bank rate is higher than the return on net assets, then an increase in the share of loans in the capital structure will lead to a decrease in the return on equity and vice versa.
Financial leverage characterizes the ratio of all assets to equity capital, and the effect of financial leverage is calculated, respectively, by multiplying it by the return on net assets, taking into account the adjustment coefficient for loans and taxes.
Let us determine the effect of financial leverage of OJSC “Belgorodstroydetal” in the implementation of the project for the acquisition of a magnetic activator for water systems, with the aim of improving product quality and increasing profits.
The enterprise plans to purchase a magnetic activator for water systems.
The amount of capital investments required for the purchase of equipment and replenishment of working capital is 1951.33 thousand rubles. Ready-mix concrete production= 33247 m 3. Cost price 1 m 3 =
1,330 thousand rubles Price 1m 3 = 1,756 thousand rubles. Bank interest for a loan = 18%. Income tax rate = 24%.
1) Let's determine the correction factor for credit and taxes.
Correction factor for credit and taxes = [(Profit from product sales - Amount of credit * (1 + Bank rate)] * (1 - Tax rate / Profit from product sales)
Credit and Tax Correction Factor = [(33247*1,756 – 33247*1,330) – 1951,33*1,18] * (1-0,24) / (33247*1,756 – 33247*1,330) = 0,88
2) Financial leverage = (Equity + Amount of credit funds) / Equity
Financial leverage characterizes the ratio of all assets to equity.
Financial leverage = (153913+1951,33) / 153913 = 1,013
3) Turnover of net assets for the project period = Revenue from sales / Net assets
Turnover of net assets for the project period = (33247*1,756) / 149870 = 0,39
4) Let's calculate the return on sales.
Return on sales = (Profit from sales / Revenue from sales)
Return on sales = (33247*1,756 – 33247*1,330) / (33247*1,756) = 0,2426 (24,26%)
5) The effect of financial leverage is an increase in the profitability of own funds obtained through the use of a loan, despite the fact that the latter is paid.
The effect of financial leverage is calculated by multiplying it by the return on net assets, taking into account the adjustment factor for loans and taxes.
Leverage Effect = Leverage * Credit and Tax Adjustment Factor * Net Asset Turnover * Return on Sales
Financial leverage effect = 0,88*1,013*0,39*0,24 = 0,0834 (8,34%)
6) Let's define the profit before and after tax.
Profit before tax = Profit - Interest on loan
Reinvested profit is the profit that goes to the accumulation fund, and then to production.
Profit before tax= (33247 * 1.756 - 33247 * 1.330) - (1951.33 * 0.18) = 13811.98 thousand rubles.
Profit after taxes= 13811.98 * 0.24 = 3314.88 thousand rubles.
Profit after taxes, interest and loan repayment= 3314.88 - 1951.33 = 1363.55 thousand rubles.
These profits can be profits reinvested.
7) Let's calculate the reinvestment ratio.
Reinvestment Ratio = Reinvested Profit / Net Profit
Reinvestment ratio = 1363,55 / 3314,88 = 0,41
8) Let's define the economic growth of the enterprise.
The economic growth of the company shows the maximum sales growth that the company can achieve without changing other operational indicators.
Economic growth of an enterprise = Reinvestment ratio * Effect of financial leverage * Equity capital growth ratio
Economic growth of the enterprise = 1,013*0,0834*0,41 = 0,0346 (3,46%)
10) Weighted average cost of capital = (Bank lending rate (%) * 1st * Amount of bank loans) / Equity + loan amount
Weighted average cost of capital = (18*(1-0,24)*1951,33) / (153913+1951,36) = 0,17%
In order to assess the financial performance of an enterprise, it is necessary to compare the return on net assets with the weighted average cost of capital
Return on net assets ≥ Weighted average cost of capital / 1-t,
t - tax rate
Since the return on net assets is higher than the weighted average cost of capital, OJSC “Belgorodstroydetal” is therefore able not only to pay interest on the loan, but also to reinvest part of the net profit into production.
Conclusion
The task of planning the activities of an enterprise, forming a budget and monitoring its implementation is one of the most important in the field of enterprise management. To solve this problem, a large amount of financial, accounting and production information is required.
The first step in the difficult path of building a system for organizing budgeting can be the theoretical and practical training of enterprise specialists in setting and automating budgeting. For these purposes, a special training program has been developed.
What does the company get in the end? The financial flows of the company become transparent for the head. They have the ability to prioritize payments; track and control the financial results of the company as a whole and for individual centers of financial responsibility; plan the movement of funds and the movement of inventory; plan the income and expenses of the company; build and evaluate internal indicators of liquidity and profitability of the company and its individual businesses. The company gets the opportunity to meaningfully move towards its goals.
Bibliography
1. Astakhov VP, Theory of accounting: textbook. manual.-M .: ECC "Mart", 2004.
2. Bakaev AS, Bezrukikh PS, Vrublevsky ND, Accounting - M .: Accounting, 2002.
3. Bochkarev V.V. "Commercial budgeting" - SPb .: Peter, 2003.
4. Burtsev V.V., Financial management: magazine 01/2005. Through budgeting to effective management - article, page 33.
5. Rich IN, Accounting. Rostov n / a: Phoenix, 2002.
6. Ivakhnik D., Tverdokhleb A., Financial Director: magazine No. 6 (36) 2005. Choosing the optimal budget - article, p. 24.
7. Nechitailo AI, Theory of accounting. - SPb .: Peter, 2005.
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When setting up a budgeting system in an enterprise, a number of issues should be considered:
1. Which department will be involved in budgeting?
2. What model will the budgeting system be based on?
3. How will the budget execution be monitored?
4. What methods and methods will be used to analyze deviations from the planned value?
When organizing a budgeting system, the first thing to consider is who should budget?
At a number of foreign companies, budgeting is carried out by special departments, sometimes called budget accounting, and employees of these departments, called controllers. Typically in Russian organizations budgeting is carried out either by an accountant-analyst or an employee of the planning and economic service.
Budgetary Accounting is designed to present the actual and standard budgetary costs and results, to develop recommendations for their optimization.
Controllers (employees of the planning and economic service) must calculate the expected result of activities by type of business and assess the reality of achieving it. In addition, they are designed to anticipate the economic situation of the organization after a certain period of time through the analysis of budget execution.
Modern budgetary accounting is developing in two directions:
In the form of integrated accounting for budget execution as part of financial or management accounting;
As an independent budget accounting, built on management accounting information (autonomous accounting).
Based on this, three forms of communication between financial, management and budgetary accounting are possible.
The first option is an autonomous system with the allocation of budget accounting into an independent subsystem using management accounting data.
In the second option, there is a separate accounting for budget execution, but budget accounting is not separated into an independent one and is part of the management one.
The third option involves an integrated system that combines financial, management and budgetary accounting. In this case, a unified system of accounts and accounting entries is used.
2.3. Simplified Universal Budgeting Model
There are two main budgeting models:
1. Simplified universal budgeting model, developed on the basis of balancing income and operating expenses.
2. A comprehensive budgeting model, developed on the basis of operating budgets, determining the amounts of accounts receivable and payable, stocks of raw materials and finished products and, on this basis, determining the main ratios of financial needs and financial capabilities.
Figure 1 - Basic budgeting models
When designing a budgeting model, you should pay attention to the fact that a complex detailed model greatly inhibits the calculation. The budgeting model with the most detailed cost and cost data can be used by organization's cost centers. In a simplified model, you can group cost centers to reduce the amount of data to analyze. The simplified model does not allow the full use of budget control tools, so it should be formed in the context of divisions.
The complexity of the budget model depends on the current and future goals and objectives of budgeting. If the organization's expenses grow faster than revenues and there is no financial control, it is more expedient to set up and automate a simplified budgeting model, which will allow you to quickly resolve the main issues.
The most simplified optimal budgeting model for a number of small organizations is the universal budget model, which is based on balancing income and operating expenses.
This model can be developed and implemented rather quickly. The advantage of a generic model will be the speed of planning and consolidation of evidence.
The setting of a budgeting system in management accounting is not legally and normatively regulated by the state. Therefore, the forms of budgets, the rules for their development, approval, implementation and control are approved by the management of the organization itself.
The development of a universal budgeting model should be carried out in several stages (Figure 2).
Figure 2 - Design process for a simplified universal budgeting model in organizations
At the first stage of developing a universal model, a number of budget items should be identified for income and expenses.
In order to have a result of the functioning of the budgetary system, it is necessary to link budgets to the centers of financial responsibility (second stage). If this does not happen, then the situation is assessed at the level of the organization. At the same time, the inefficiency of the organization's work does not make it clear what caused this. At the same time, the centers of responsibility should cover all structural divisions, and within the division it is necessary that there are those responsible for certain areas of work, so that managers, specialists and workers are responsible for the efficiency of the resources expended.
With a simplified universal budgeting model, the center of responsibility can be a structural unit.
Introduction 4
1. The essence and features of enterprise budgeting 7
1.1 The concept of the essence and features of enterprise budgeting __ 7
1.2 Methodology for organizing budgeting at the enterprise __________ 15
1.3 Budget execution control _______________________________ 21
2. Analysis of the budgeting system in LLC "LGEK" 28
2.1 Technical and economic characteristics of LLC "LGEK" ____________ 28
2.2 Criteria for the organization of the enterprise budgeting system _____ 36
2.3 Disadvantages of the existing enterprise budgeting system 46
3. Ways to improve the budgeting system in LLC "LGEK" 53
3.1 Possible ways to improve the budgeting system at the enterprise ____________________________________________________________ 53
3.2 Improving the reliability and efficiency of the budgeting system in LLC "LGEK" _____________________________________________________ 58
Conclusion 62
Bibliography 67
For years, companies have viewed their budgets as simply a binding estimate of upcoming annual revenues and costs. This attitude is now changing rapidly as the market demands more competitiveness and businesses are forced to be more dynamic. Successful companies continually improve the accuracy of their forecasts of future operations and associated resource requirements. This not only increases the importance of budgeting and planning, it also changes the traditional roles of the various tables. budget systems and software of our own production.
Research by the Institute of Management and Administration shows how the importance of budgeting and planning to corporations is increasing. CEOs of large and small companies were interviewed about their main functional responsibilities, and about 59% of them cited budgeting as their key function.
This same study shows that the budgeting process now includes many more different elements and people within the organization. In other words, the days when several specialists in corporate headquarters were creating a budget in isolation are quickly becoming a thing of the past: budgeting has become a function of various parts of the organization. When managers were asked about expanding their oversight functions, respondents noted that budget control and strategic planning were among their top responsibilities. It also confirms that there is a persistent trend towards more sophisticated budgeting and planning.
Currently, our country is undergoing tremendous changes associated with a radical restructuring of all spheres of state life. Gone are the days of complete chaos and "balancing over the abyss" caused by the would-be reformers.
Today, along with a tangible recovery, the economy is also reviving as a structural and integral part of the state. Russian business is gradually abandoning its principles of the times of "wild capitalism". Despite all the incompleteness of this process, there is already a tendency towards civilized conduct of business in business structures.
By achieving stability in the economy, Russian business got the opportunity to set the vector of its development for a certain perspective (month, quarter, year, etc.). This, in turn, gives rise to a chain reaction in the form of increasing the stability of the business, its predictability and attractiveness for investors both in Russia and abroad.
In this regard, the importance of the issue of the development of commercial budgeting is beyond doubt, since it carries guarantees of stability for individual companies and for the economy as a whole.
Thus, the budget represents, expressed in specific indicators, goals, alternatives for achieving goals, the consequences of the emergence of alternatives on goals, the actual results of the implementation of managerial decisions, deviations from the planned results. It can also be defined as a decision-making process by which an enterprise evaluates the feasibility of an inflow and outflow of assets. The subject of the study of the final qualification work is budgeting as the basis for organizing the company's finances. The object of the study is the existing budgeting system of Lipetsk City Energy Company LLC. work is the study of the theoretical aspects of budgeting, as well as the study of the methodology for setting up the budgeting system at the enterprise on the present stage and the main problems associated with this. To achieve the goal in the final qualifying work, the following tasks are highlighted: - to reveal the essence and features of budgeting at the enterprise; - to analyze the budgeting system in Lipetsk City Energy Company LLC; - on the basis of the material under study, collect and formulate possible ways improving the budgeting system and among them highlight those that can be recommended for implementation in Lipetsk City Energy Company LLC. The first chapter is devoted to the consideration of the essence of the budgeting process in the enterprise, and also paid attention to the features of this process. The methodology of organizing budgeting as a system is considered in sufficient detail. Particular attention is paid to the process of monitoring budget execution, since without this element the very meaning of budgeting is lost. In the second chapter, a detailed analysis of the budgeting system in OOO LGEC is carried out. At the same time, the technical and economic characteristics of the Company were presented. The main criteria for organizing the budgeting system of this enterprise are listed, as well as the disadvantages of this system are indicated. In the third chapter, possible ways of improving the existing budgeting system at enterprises and, in particular, in LLC LGEK are considered. It should be noted that in Russia the topic of budgeting as a method of management the financial activity of the enterprise is not widely studied and covered both in the educational literature on the theory of finance and in the works placed on the pages of magazines and newspapers.
Planning is a means to an end. V modern conditions planning becomes the central link in management. The market does not reject planning. On the contrary, in a competitive struggle, it is impossible to enter the market with your own products without a well-thought-out plan.
In Western practice, talking about financial plans, usually operate with the word "budget". A budget is a financial document that reflects a series of planned events that will take place in the future, i.e. forecast of future financial transactions.
The system of budgets allows the head to assess in advance the effectiveness of management decisions, to allocate resources in an optimal way between departments, to outline the ways of personnel development and to avoid a crisis situation. Along with the concept of "developing budgets", many domestic enterprises use the term "budgeting".
Budgeting has the following objectives:
· Development of a business concept:
· Planning the financial and economic activities of the enterprise for a certain period;
· Optimization of costs and profits of the enterprise;
· Coordination - coordination of the activities of various divisions of the enterprise;
· Communication - bringing plans to the attention of managers at different levels;
· Motivation of local leaders to achieve the goals of the organization;
· Monitoring and evaluating the effectiveness of local managers by comparing actual costs with the standard;
· Identification of needs for cash resources and optimization of financial flows.
Budgeting is a tactical planning process, hence the name of the management function - budget planning.
Budgeting - the creation of planning technology, accounting and control of money and financial results. A budget is a plan for a company's activities for a certain period, expressed in monetary terms. It performs various internal planning functions:
· The budget as an economic forecast. Major planning decisions are made in the formulation of strategic planning, and the budget formulation process is essentially a revision of those forecasts.
· The budget as a basis for control. As the budgeted plans are implemented, the actual results of the company must be recorded. Comparing the actual figures with the planned ones, it is possible to carry out the so-called budget control.
· The budget as a means of coordination. A budget is a plan expressed in value terms in the field of production, procurement of raw materials or goods, sales of products, investment activities, etc.
· The budget as a basis for setting the problem. When developing a budget for the next period, it is necessary to make decisions in advance, before the start of activities during this period.
The organization of work on internal planning can be different. There are usually two budgeting schemes:
· According to the "top-down" method, the company's management determines the goals and objectives, in particular the target indicators for profit. Then these indicators are detailed and included in the plans of the departments.
