Budgeting in the enterprise

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Budgeting enterprise is one of the most important components of economic planning, which in turn is part of the financial management.Essentially it is a special kind of planning that is based on the principles and methods of execution, preparation, monitoring, evaluation and adjustment of budgets presented in the form of a specific form of plans.In another way we can say that the enterprise budgeting is planning for the future activities of the organization, the results of which are made with the help of budgets.

Its main purpose - is to develop and increase the validity and effectiveness of various management decisions.The mechanisms that have budgeting in the enterprise, may be effective in trying to make the workflow more efficient, get new resources to increase the targets.Use obvious.

Budgeting allows the enterprise:

  • optimize revenue and expenses;
  • coordinate the activities of different departments of the enterprise;
  • reveal that public resources there is a need, but on what may be waived;
  • analyze the financial performance of the company or just the whole thing;
  • strengthen discipline within the enterprise.

must be borne in mind that budgeting is separate from the enterprise tax, and accounting.Budgets tend to be created under the current plan.This means that the importance of conditionality of the strategic plan.

budget is the operational plan with the help of which we can determine the ratio of cash flow to any particular division or activity for a certain period of time.On the basis of it can predict future results, meaning the commission of certain actions.

other words, the budget can be considered as a quantitative expression of the plans, which are established for a certain period of time.This refers to the plans:

  • expenditures and revenues;
  • investment;
  • use of all kinds of resources;
  • cash flow;
  • attract new sources of funding.

length of time for which the budget is developed, called the budget period.Determined he current planning at the enterprise.The planning horizon (its duration) in turn has a direct link with the forecast horizon, and also depends on the volatility outside of the enterprise.

budget process is an amalgamation of the processes that are directly related to the budget (meaning the formation, approval, and monitoring).He developed in accordance with the internal state of the company.

budgeting system is a combination of those measures, which are used for the implementation of the budget process.It consists of the following elements:

  • responsibility centers;
  • financial management structure;
  • budgeting techniques;
  • budget management;
  • fiscal consolidation.

Organization of budgeting in the enterprise can be in the presence of:

  • of responsibility and authority;
  • strict regulation of relations between employees;
  • qualified personnel;
  • accepted and prescribed functions of units.

financial structure of budget management involves:

  • distribution of primary and secondary functions in the administration;
  • creation of a suitable incentive system;
  • creation of high-quality information infrastructure;
  • definition of mandatory registration centers;
  • definition of responsibility centers;
  • establishment of internal rules and regulations of their own.