Budgeting in an enterprise is a tool for managing an organization based on planning, organizing, monitoring and evaluating the implementation of economic indicators. It is used to manage financial resources and make effective decisions aimed at fulfilling the financial objectives of the company.

Budgeting is a management system that can be adapted to the needs of the company. The introduction of a full-fledged system will require changes methods for making a significant number of management decisions.

Budgeting Goals

	What gets	What should you be ready for
Owner, CEO	Formalization in specific financial figures of their expectations from the company's leaders. Motivation of performers "for a feat"	Transfer authority to make a number of decisions to budget executors. Willingness to follow approved plans. Open information
Heads of departments	The clarity of the criteria for evaluating their results. Authority to dispose of resources to carry out plans.	Take on the fulfillment of budgetary obligations. Additional budgeting tasks.
CFO	Powers to organize the budget process. Financial planning tool.	Timely budget control. Organization of the budget process.

Main budget parameters:

• Sales volume by market and/or product group
• Net operating cash flows
• The level of expenses for the main items: cost, administrative and other
• Net income, earnings before interest, taxes and depreciation (EBITDA)
• Level of inventories, receivables and payables
• Maximum level and structure of borrowings and/or capital raising
• Cost of corporate withdrawals (if any)

The main reasons for failure are:

• lack of staff awareness about the goals and the budgeting process itself;
• lack of necessary skills and knowledge to participate in the budgeting process;
• disengagement;
• no incentive system.

4 stages of budgeting in the enterprise

Stage 1: planning, adjustments and control of the use of the company's funds. At this stage, the most important is operational planning and control over the implementation of operational payment plans. After the implementation of this stage, the logical continuation is the control and optimization of costs.

Stage 2: planning, adjustments and control of expenses by items and by departments. At this stage, cost optimization is carried out by analyzing all departments separately, which in general causes savings for the company as a whole. The most important is the involvement of responsible employees of departments in the process of managing their expenses. The logical continuation is efficiency assessment and cost optimization based on efficiency.

Stage 3: planning, adjustments and control of income and expenses by items and in the context of the Central Federal District. At this stage, it is no longer cost optimization, but optimization, which consists in reducing inefficient CFDs or in bringing CFDs to the lowest possible level of costs with maximum return. The logical continuation is the forecasting and modeling of the development of the entire company as a system of interacting CFDs.

Stage 4: planning, forecasting, modeling and monitoring the execution of plans and forecasts for the state of the entire company as a system of interacting CFDs. At this stage, based on the budget models of individual CFDs, a budget model for the entire company is built. Changes in the FRC models (both actual and planned) make it possible to predict changes in the company's model as a whole.

Stage 2 procedures

Most companies go through the first stage on their own and most often unsuccessfully try to implement stage 2.

The budgeting methodology at the enterprise should be finalized in the following blocks:

• collection of primary information on budgeting expenses and incomes;
• control of primary information;
• data consolidation;
• budget protection;
• current control of budget execution;
• adjustment of budgets;
• incentives for budgeting participants.

Methodology for collecting primary budgeting information. This methodology ensures the automatic collection of all data for the formation of budgets. This technique is used by the heads of departments to fill the budget system with data. An important point is the forecasting and formation of each other's indicators by divisions (the so-called cross-formation). The heads of departments, whose number of expenses are planned by other departments, in such a situation are forced (for the purpose of control) to understand why the value is such, they begin to think about how to reduce costs. When using this technique, the most accurate and controlled planning of primary data is achieved.

Technique of control of primary information. This technique is intended for heads of departments, used to control the formation of planned costs that are developed by other departments. The head of the division is responsible for his entire budget. Also, this technique is used by members of the board of directors for the purpose of accurate and complete planning of budgets in general. This is the second level of control. Also, the controlling department (or the unit responsible for maintaining management accounting and budgeting) must conduct selective control over the correctness of using the methods. This is the third level of control.

Method of data consolidation. For the convenience of data consolidation (from private indicators to general ones) and understanding why individual consolidated indicators are exactly the way they are (from general to specific), this methodology should be two-sided and absolutely transparent.

Methodology for protecting budgets. This technique serves for collective decision-making on the validity and accuracy of the process budgets of the enterprise and the budgets of departments. The methodology is designed for highly efficient work of the advisory body responsible for budgeting in general (budget committee).

Technique of the current control of execution of budgets. In the process of monitoring the execution of budgets, the controlling department creates a reporting system designed to control and respond in a timely manner to the quality of the budgeting process. In this reporting system, it is important to develop a technology for the work of budget controllers with reporting (a system of indicators), that is, controllers and members of the board of directors do not need to read all reports in a continuous way, but only pay attention to deviations in indicators and study reports on deviations.

Methodology for budget adjustments. This methodology should be used by all participants in the cost budgeting process in order to clarify budgets in connection with changes in planning prerequisites. An important part of adjusting budgets is the modeling process to study the behavior of the Company's model when certain budgeting assumptions change.

Methodology for stimulating participants in budgeting. Stimulation of budgeting participants is one of the most important techniques. This technique is intended for the General Director (as a systematic way to stimulate budgeting participants) and members of the Board of Directors (as a systematic way to stimulate the heads of departments). The lack of incentives or its insignificance make the budgeting process more nominal than a real tool for managing a company.

Stage 3 Methods budgeting at the enterprise should be finalized by the following blocks:

• assessment of the effectiveness of the CFD;
• collection of primary information on income budgeting in the context of the Central Federal District;
• consolidation of internal and external revenues;
• finalization of the methodological blocks of stage 2.

Step 4 Methods should be completed with the following blocks:

• creation of CFD models;
• creation of a consolidated model of the company;
• model correction system.

All created methods should be automated. Otherwise, the budgeting system with a high probability will not even go to stage 2.

Implementation practice. Basic principles:

1. Budgeting is management based on balanced financial indicators.
2. Budgeting in the enterprise covers the full contour and all levels of management.
3. Budgeting is carried out on a regular basis.

Related term:

Federal Agency for Education

ALL-RUSSIAN CORRESPONDENCE FINANCIAL AND ECONOMIC INSTITUTE

Faculty of Finance and Credit

Department of Finance and Credit

Course work

in the discipline "Financial management"

Topic: Budgeting as a tool for operational financial management

Barnaul 2011

INTRODUCTION

THEORETICAL BASIS OF BUDGETING

1 The concept of budgeting, its goals and role

2 Main functions of budgeting

3 Types of budget planning

ORGANIZATION OF BUDGETING AT THE ENTERPRISE AND ITS ROLE

1 Implementation of the budgeting system

2 Stages of the budget process of an enterprise

3 Budget control and variance analysis

CALCULATED PART

CONCLUSION

INTRODUCTION

In modern economic conditions, Russian enterprises are forced to look for more effective methods of monitoring the result of financial and economic activities, using the entire arsenal of financial management tools, one of which is budgeting.

Budgeting is considered as an integral system for choosing tactical planning goals at the enterprise level within the framework of the adopted strategy, developing plans (cost and income estimates) for future operations and monitoring the implementation of these plans, i.e. essentially as a system of internal financial management.

The main task of budgeting is to increase the efficiency of the enterprise on the basis of target orientation and coordination of all events covering changes in economic assets and their sources, identifying risks and reducing their level, as well as increasing flexibility in the functioning of an economic entity.

The formation of the enterprise budget is the main tool for short-term financial planning, which determines the sources and directions for the use of funds. At the same time, the budget (financial action plan), being a method of regulating the economy of an enterprise, allows not only to manage finances, but also to harmonize relations both within the economic entity and with the external environment.

The purpose of this work is to consider budgeting as a tool for operational financial management in the flexible development of an enterprise, to develop and review schemes for the interaction of various budgets, to organize budgeting in an enterprise, to consider the role of budgeting automation in enterprises.

The object of the study is the use of budget planning in enterprises by financial managers.

The subject of the study is the role of budgeting in the preparation of the final financial statements necessary for planning, monitoring and analyzing the activities of a particular enterprise.

Any budgeting is a task that must be solved in a systematic way, covering all areas of the organization's activities in order to present a complete picture of what is happening, a comprehensive vision of its activities and operational management of its assets.

1. THEORETICAL BASIS OF BUDGETING

.1 The concept of budgeting, its goals and role

One of the most important areas of internal activity of any organization is budgeting - a management tool for the distribution (planning) of resources, characterized in monetary and physical terms to achieve strategic business goals.

At any operating enterprise, there are objects that are subject to strategic planning procedures, and hence budgeting. Comparison of target indicators with those already achieved to date provides an excellent opportunity to analyze the current situation and make appropriate adjustments to the company's future development plans, based on past results.

The purpose of budgeting is:

implementation of periodical planning;

ensuring coordination, cooperation, communication;

requiring managers to quantify their plans;

providing cost awareness;

creation of a system for assessing and monitoring performance;

motivation of employees by focusing on achieving the goals of the organization;

compliance with the requirements of laws and treaties.

The main goal of budgeting is to provide the production and commercial process, which is necessary in terms of volume and structure with the necessary financial resources.

The main tasks of budgeting are:

Planning. The preparation of plans and budgets allows managers to set specific goals for the future, anticipate problems and find ways to solve them, determine the direction of development, and justify the allocation of financial resources.

Analysis and Control. Control over the activities of the Company can be carried out by comparing the actual results with the planned ones.

Coordination. The Company's budgeting process forces departments and individual leaders to work together to ensure that goals are achieved.

Grade. Since the budget is a plan expressed in money, the degree of its implementation can be used as a criterion for evaluating the performance of departments and managers.

Motivation. The budget reflects the financial results expected from specific contractors and acts as one of the incentives to achieve them.

Managers do not always represent the cost of their decisions. The budget helps them to better understand what certain actions cost, to find a common language when evaluating proposed projects. During the budgeting process, the manager has the opportunity to compare the costs and benefits of alternative courses of action. Comparison of actual results with planned ones makes it possible to determine the effectiveness and efficiency of activities.

Does management fully understand the need to use a budget management system? In such cases, it is necessary to focus on what benefits the use of such a system gives to the management of enterprises. First, budgeting develops a clear understanding and the ability to analyze options for achieving goals with the help of a financial plan. Secondly, the choice of the optimal variant of the financial plan according to the specified criteria: profit, cash receipts, balance sheet structure, and so on. Third, financially unsound decisions are minimized. After all, the budget is adopted taking into account the forecast of external and internal changes. Other equally important advantages include the possibility of timely diagnosis of a probable problem and a way out of a difficult situation. For example, full awareness of the necessary financial and material resources makes it possible to predict periods with their deficit in advance and prepare solutions in advance - either this is a shift in payments over time, or loans, or an increase in sales. The ability to evaluate the performance of departments within an enterprise is also one of the most important advantages of using a budgeting system. It becomes possible to determine costly and unprofitable types of business.

A well-established budgeting system gives the manager the opportunity to assess, on the one hand, how things are going in various departments of the company, and on the other hand, how the situation is developing as a whole. This system allows you to effectively manage not just individual types of businesses, but a combination of different types of activities.

1.2 Basic functions of budgeting

To fully understand budgeting, it is necessary to list the functions that it performs:

Budgeting is a tool to achieve company goals.

Before developing a plan, you need to define goals. Goals are formed at the strategic level of corporate governance. Thus, budgeting is a tool for the implementation of the enterprise strategy. With the help of this technology, an inextricable link between strategic goals and plans aimed at achieving them, and ensuring the implementation of plans by operational processes, is ensured. It is budgeting that drives the strategy.

Budgeting as a planning tool:

Budgeting is an integral element of the overall planning process, and not just its financial part. It is advisable to introduce the mechanism of budget planning of income and expenses to ensure savings in money, greater efficiency in managing these funds, reducing unproductive expenses and losses, as well as to increase the reliability of planned indicators (for tax planning purposes).

Thus, in the financial system of an enterprise, financial plans act as a guide that allows you to navigate in its financial capabilities and choose the most effective actions in terms of final results.

Budget planning is the most detailed level of planning, which is the process of preparing individual budgets for structural units, developed on the basis of programs approved by senior management.

Planning the activity of an enterprise became impossible without the formation of a budget as the main tool for flexible enterprise management, providing accurate, complete and timely information to top management.

Planning and budgeting is an integral part of effective business management. In modern Russian business conditions, more and more attention is paid to budgeting as one of the components of planning.

As practice shows, enterprises that have implemented a budgeting system provide, according to various estimates, an increase in revenue from 10 to 15%, while simultaneously increasing the stability of the enterprise as a whole.

Budgeting is management with the help of budgets:

The main tools of budget management technology are three main budgets:

Cash flow budget for liquidity management;

Income and expense budget to help manage operational efficiency;

The forecast balance required to manage the value of the company's assets.

Planning and monitoring the result of the enterprise's activities became impossible without the formation of a budget as the main tool for flexible enterprise management, providing accurate, complete and timely information to top management. The budget of the enterprise reflects the results of planning and control in the form of planned, expected and actual data and the deviation of actual indicators from planned ones. With its help, a strategy for the effective development of an enterprise in a competitive and unstable environment is developed, the work of the enterprise is analyzed and controlled. Therefore, the budget serves as an important management tool in the development of measures to achieve the goals of the enterprise.

Often, the developed plan is put "on the shelf" until the end of the year, when it's time to take stock. It is clear that such a plan is useless, and the time spent developing it is wasted.

Budgeting, like any management process, must be carried out continuously. The approved plan is only the basis for continuing the planning work. It is quite fair to observe that any plan becomes obsolete the moment it is approved. The reason for this is the constant change in the conditions and parameters that served as the basis for the preparation of plans. Our understanding and assessment of the situation is also changing, and there is a constant need to make adjustments to the developed plans.

1.3 Types of budget planning

By the duration of the period for which the budget is being developed, it can be distinguished.

short term budget

development budget,

indicative.

Short term budget (1-3 months). For Russian enterprises, the most optimal term for short-term (current) budgeting is 3 months (quarter). This coincides with the frequency of fiscal reporting, which greatly facilitates the work of the enterprise's accounting department, which is the main "information" center of the enterprise.

Short-term budgeting is characterized by:

mandatory performance. The short-term budget is the law for the structural divisions of the enterprise and their leaders.

no adjustment. The short-term budget is adjusted in exceptional cases with the approval of the top management of the enterprise. Adjustment of the short-term budget can only be caused by force majeure.

the global nature of the control-stimulating function of the budget. It is the performance indicators of the short-term budget that underlie the Regulations on material incentives for employees of the enterprise;

high level of detail of budget indicators. So, for sales departments, not only the total value of the planned sales volume is established, but also its structure by type of product, production departments receive a budget broken down by cost items in the context of individual production lines, management services, as an integral part of the budget task, must comply with a rigidly established staffing table , the amount of travel and administrative

Development budget (1 year). This budget belongs to the category of long-term. It is characterized by:

mandatory performance. At the beginning of the year, the enterprise adopts a short-term budget (for a quarter) and a development budget (for 1 year), and in the future, quarterly budgets are adopted within the framework of the development budget.

possibility of correction. Adjustments to development budget figures are common, although adjustments to the current quarter's budget figures are generally not allowed.

selective nature of the control-stimulating function. For the achievement and overfulfillment of annual targets, as a rule, the heads of structural divisions (top and middle management), and not ordinary employees of divisions, are rewarded.

less detailed budget indicators. In the development budget, most often, only integral cost values ​​are fixed;

the presence of a profitable component in the investment budget.

Indicative rolling budget. This is a special kind of budget. It is adopted at the beginning of the year and is completely similar to the development budget. After the expiration of the 1st quarter, another quarter is added to the "rolling" budget, after the expiration of the 2nd quarter - the 2nd quarter of the next year, etc. This ensures continuous 12-month planning. This circumstance is very essential for the effectiveness of management planning in the enterprise. The adjustment of the development budget and the adoption of the next quarterly budget during the year occur simultaneously and on the basis of the development of the next "rolling" annual budget. Thus, when reviewing the volume of investments in the third quarter of the development budget, managers must know the situation not only before the end of the year, but also a year ahead, otherwise the adjustment of investment policy may not be sufficiently justified. Indicative rolling budget:

First, not only is it optional, but by definition it is never fulfilled and serves purely analytical purposes. There is no control-stimulating function in it;

Secondly, the detailing of budget indicators is the same as in the development budget.

Thus, the combination of two long-term consolidated budgets and one short-term one makes it possible to pursue a management policy in which the strategic and current goals of the enterprise are balanced and interconnected. It is expedient to use this approach at large industrial enterprises, where the additional costs of conducting planning and analytical work are justified in the context of improving the quality of managerial decision-making.

The consolidated budget is a plan of the enterprise's activities for a specified period of time, expressed in a number of target (budget or planned) indicators covering all segments of the company's business and divisions that make up its organizational structure. In domestic and translated literature, the definitions of “basic budget”, “master budget” are also often found. The consolidated budget consists of three sub-budgets of the 1st level: operational, investment and financial.

Operational budget - sub-budget of the 1st level, which is part of the consolidated budget of the enterprise and is a plan of income, expenses and final financial results of the enterprise for the budget period. The operating budget consists of a number of sub-budgets of the 2nd level: the sales budget, the production budget, the finished goods inventory budget, the fixed costs budget, and the procurement budget.

The operating budget focuses on modeling future expenses and income from current operations over the budget period.

The operating budget consists of a number of second-tier budgets:

sales budget;

production budget;

budget for stocks of finished products (trade balances);

fixed cost budget;

procurement budget.

Investment budget - sub-budget of the 1st level, which is part of the consolidated budget of the enterprise and is a plan for capital expenditures and long-term financial investments of the enterprise for the budget period.

The investment budget considers the issues of renewal and disposal of capital assets, which form the basis of the investment cycle.

The financial budget is a sub-budget of the 1st level, which is part of the consolidated budget of the enterprise and is a plan:

First, cash receipts and expenditures,

secondly, the movement of all liquid resources and current liabilities of the enterprise for the budget period.

The purpose of the financial budget is to plan the balance of cash receipts and expenditures, and in a broader sense, the balance of working capital and current liabilities to maintain the financial stability of the enterprise during the budget period.

The "output" results of the budget process are the planned forms of consolidated financial statements:

statement of financial results - the "output" form of the operating budget;

cash flow statement and statement of changes in financial condition - "output" forms of the financial budget;

investment report - the "output" form of the investment budget;

balance - an integral "output" form that combines the results of all three main budgets that make up the consolidated budget of the enterprise.

Each of the sub-budgets of various levels occupies its own, strictly defined "niche" and plays its own clear role in the technology of compiling the company's consolidated budget.

The basis for the preparation of consolidated budgets is a strategic plan that defines the main priorities and development goals and outlines the mechanisms for achieving the goals. Based on the strategic plan, three master budgets are developed: one short-term budget and two long-term budgets. Budgets differ in terms of terms, functions, the degree of mandatory execution, and the possibility of adjustment.

2. ORGANIZATION OF BUDGETING AT THE ENTERPRISE AND ITS ROLE

.1 Implementing a budgeting system

The introduction of a budgeting system in an enterprise means the introduction of technologies for managing the processes of planning, accounting, control and analysis, which make it possible to correlate resources, goals and results of the enterprise's activities.

The introduction of a budgeting system is necessary in an enterprise when:

The company is growing rapidly, developing in all directions, and there is a need to calculate development alternatives depending on their own actions, to transform long-term goals into short-term plans for individual departments and employees.

Competition is constantly toughening, the market is becoming more dynamic, the emerging uncertainty in the medium term and the long period of reaction to changes makes it necessary to plan actions in advance.

The company as a result of its development creates a complex organizational / legal structure, which leads to the need to coordinate the plans of various structures (people!), Competing for resources.

There is a shortage of financial resources and there is a need for external financing.

There is a rash, situational business management.

The budgeting process itself should begin with the procedure for its implementation. This procedure, as current practice confirms, lasts from 20 to 30 weeks. Such a long implementation period can frighten company management. However, if we treat this procedure as an investment project, then the positive result is obvious. The stage of implementation of the budgeting system plays an important role in the further performance as such. The success of the created management system depends on how competently the implementation will be carried out.

The results of the introduction of the budgeting system at the enterprise are:

Implementation of planning activities aimed at a specific result.

The ability to predict the financial results of individual divisions and the company as a whole, taking into account the risk factor.

A system for comparative analysis of the financial efficiency of various projects, divisions and the company as a whole.

Financial discipline and subordination of the interests of individual structural divisions to the interests of the company's owners.

A transparent financial management system for the enterprise, which allows you to achieve your goals.

In the general case, five stages of setting up a budgeting system in an organization can be distinguished (Fig. 1).

Figure 1 - Stages of setting up a budgeting system

The purpose of the first stage (formation of the financial structure) is to develop a model of the structure that makes it possible to establish responsibility for the execution of budgets and control the sources of income and expenses.

At the second stage (creation of the budget structure), the general scheme for the formation of the enterprise's consolidated budget is determined.

As a result of the third stage, the accounting and financial policy of the organization is formed, that is, the rules for maintaining and consolidating accounting, production and operational accounting in accordance with the restrictions adopted in the preparation and control (monitoring) of budget implementation.

The fourth stage is aimed at developing a planning regulation that defines the procedures for planning, monitoring and analyzing the reasons for non-fulfillment of budgets, as well as the current adjustment of budgets.

The fifth stage (introduction of the budgeting system) includes work on drawing up operational and financial budgets for the planned period, conducting scenario analysis, and adjusting the budgeting system based on the results of analyzing its compliance with needs.

When preparing and setting budgeting at an enterprise, and, in the future, developing the budget process, managers and key specialists must be proficient in modern management methods and technologies, skillfully use analytical procedures in preparing and making management decisions.

The budget of an enterprise is always developed for a certain time interval, which is called the budget period. The correct choice of the duration of the budget period is an important factor in the effectiveness of enterprise budget planning.

The budget process is not limited to the stage of drawing up a consolidated budget. In general, the process is a closed loop of financial management, including three successive stages: the stage of development and draft of the consolidated budget; approval of the draft budget and its inclusion in the structure of the scientifically based business plan of the organization; analysis of budget execution based on the results of the current year (Fig. 2).

The budget cycle includes the period of time from the beginning of the first stage to the completion of the third. The budget process should be continuous, that is, the completion of the analysis of the current year's budget execution should coincide in time with the development of the next year's budget. Thus, the analysis of budget execution is both the starting and the final stage of the budget cycle:

Figure 2 - Stages of the budget process of the enterprise

The first stage (the stage of developing a draft consolidated budget) is to draw up a preliminary draft budget for the next planning year. Particular attention is paid to the assessment of the implementation of profit and profitability plans. Such an assessment is based on a careful development of the composition of the costs included in the cost of production. At this stage, the production program is evaluated (its qualitative and quantitative parameters, changes in pricing and credit policies) and the new production potential of a commercial organization is determined based on an analysis of the rational use of assets, the development of new technologies and types of products. The prepared preliminary draft budget is adjusted in connection with changes in external and internal conditions.

At this stage, the work of a large number of involved ordinary personnel of planning and economic services and structural divisions is required, which approves budget targets: main production shops, commercial directorate (sales department), logistics department, etc.

The second stage (approval stage) is reduced to the preparation of the final draft budget and its inclusion in the structure of the scientifically based business plan of the enterprise.

In small enterprises, the consolidated budget is usually developed by the accounting department and approved by the president of the organization.

In medium and large enterprises, the decision to approve the consolidated budget can be made by:

the board of the organization, which includes senior management;

president of the organization (in this case, the board of the organization is an advisory body to the president)

board of directors of the organization;

general meeting of shareholders (the board of directors submits a draft consolidated budget for approval by the general meeting of shareholders).

The approved budget is seen as a guide to action.

The third stage is the analysis of budget execution based on the results of the past year. At this stage, an analysis of the financial condition of the enterprise is made, on the basis of which the necessary adjustments are made to the tactics and strategy of the economic development of the organization. In order for the budgeting system to be effective, a number of prerequisites are necessary, without which this system simply cannot work.

The construction of a complete system of organization budgets for a different perspective (long-, medium-, short-term) is shown in fig. 3:

Figure 3 - Organizational budget systems

In a particular organization, it is not necessary to form a complete system of budgets, everything depends on its activities, and some blocks of this scheme may be missing.

Sales budget. The purpose of this budget is to calculate the volume of sales in general and for specific types of products. Here it is necessary to take into account the company's development strategy, its production capabilities, the sales market and the prospective opportunities for its expansion.

production budget. The budget determines the volume of production, taking into account the volume of sales and stocks of finished products.

Cost and purchase budgets for direct materials. In this budget, the requirements for raw materials and materials, the volume of purchases and the total cost of their acquisition are calculated. Production volumes, costs per unit of output and stocks of raw materials are taken into account.

The budget of direct labor costs. The total costs of attracting labor resources employed directly in production are determined. The initial data are the results of calculating the production budget and wage rates.

Production overhead budget. The budget is made up of overhead items.

Manufacturing cost budget. The calculation is carried out in accordance with the method of costing (for full or variable costs).

Business expenses budget. A forecast estimate of overhead costs for the full sale of products is calculated.

Management budget. This includes forward estimates of administrative overheads.

After the approval of the company's budget, it becomes the basis for current management for the entire period of its validity.

2.3 Budget control and variance analysis

Deviations are usually called the difference between the budget and actual indicators. Budgetary control is carried out for the timely detection of deviations and appropriate response to them.

Budgetary control is the process of comparing actual results with budgeted ones, analyzing deviations and making the necessary adjustments. Budget control is carried out by an accountant-analyst, who indicates in a special report on the implementation of the budget deviations in the current period, from the beginning of the year, the deviation trend, its materiality and his comment and sends it to the manager for making a corrective decision. If the deviations are significant, then additional reports are requested and analyzed to identify the reasons for the deviations. Deviations can be due to planning (associated with errors in calculations when calculating costs and prices) or due to activities (as a result of personnel actions, fluctuations in demand, prices).

There are deviations between actual and budgeted flexible budget (due to costs and prices) and static budget (due to changes in sales volume). In this case, there are two indicators of efficiency and effectiveness.

Efficiency characterizes the relationship between the resources spent and the results achieved, and effectiveness is a measure of achieving the goal. Analysis of deviations is done by cost items in order to identify how the deviation was obtained.

To compare the actual results achieved with plans, the actual budget of the company is formed on the basis of management accounting data. Usually summing up and comparing them with plans is carried out monthly. A significant deviation of actual results from the plan should serve as a signal prompting the company's management to make decisions:

apply measures of personal responsibility to managers who did not ensure the implementation of plans;

reallocate resources to eliminate the identified deviation;

adjust plans to reflect new circumstances;

reconsider the goals underlying planning in connection with a change in the situation.

3. CALCULATION PART

Financial forecasting and selection of funding sources.

You are the financial manager of JSC Intersvyaz, which operates in the production of modern means of communication. You will need to analyze the financial statements of this joint-stock company and determine the growth rate of production volumes, based on the economic trends that have developed at the enterprise. According to the calculations of the Department for Prospective Development of Intersvyaz JSC, in order to maintain competitiveness, it is advisable to increase the volume by at least 1.5 times.

Required:

Determine the financial capabilities of JSCs to increase production volume and, accordingly, economic potential through their own financial capabilities and attract additional financial resources.

Prepare pro forma financial statements under the following conditions:

the maximum possible growth rate of production volumes under the given conditions;

increase in the cost of purchasing material by 15%.

To do this, it is necessary to calculate the forecast values ​​of financial reporting indicators, determine the need for funding sources using the appropriate balance model and select financing options from the possible ones:

short-term bank loan;

long-term bank loan;

The interest rate for a loan is 10% for short-term loans, 20% for long-term loans.

Loan conditions:

creditworthiness and financial stability of the enterprise (it is necessary to give an opinion on the possibility of lending);

the overall level of financial dependence is not higher than 50% of the sources of funds;

general liquidity of the enterprise (coverage ratio not less than 1.05).

At the time of calculation, 10 thousand units are in circulation. ordinary shares. The market value corresponds to the nominal value. Reducing the level of dividends per share is inappropriate, as this will adversely affect the level of their liquidity and the investment attractiveness of JSCs.

It is assumed that all production capacities are involved in the enterprise, and the structure of assets optimally corresponds to the volume of production.

The following questions need to be answered:

) Will the enterprise, under existing restrictions, be able to provide the necessary financing for the expansion of production and commercial activities;

) What rate of economic growth of JSC Intersvyaz is possible under the given restrictions;

) Is such an expansion of activities expedient from the point of view of the impact on the level of self-financing of the enterprise in the future, its financial stability and profitability;

) Will the rate of economic growth of JSC change in the future?

Initial data for analysis and financial calculations are presented in the financial statements of Intersvyaz JSC for the reporting year (Table 1; Table 2)

ASSETBeginning of periodEnd of period123I. Non-current assetsIntangible assets: residual value20 88321 070 Construction in progress4 0091 700 Fixed assets: residual value94 76593 819Long-term accounts receivable1 8211 753Other non-current assets00Total for section I121 478118 342II. Current assetsInventories: industrial stocks15,0377,465work in progress4,2185,898finished products6,9175,112Accounts receivable for goods, works, services:42,28,237,465Accounts receivable for settlements on advances issued412 0Other current receivables2,959,016 Cash and cash equivalents: in national currency41 32311 730in foreign currency6 7455 218Other current assets00Total Section II117 229 81 904Balance sheet238 707200 246LIABILITIESBeginning of periodEnd of periodI. Own capital Authorized capital 60 00060 000 Additional capital 31 38234 527 Reserve capital 15 00015 000 Retained earnings (uncovered loss) 10 22314 879 Total for section I116 605124 406II. Long-term liabilitiesCredits and borrowings7 4100Other long-term liabilities00Total for section II7 4100III. Short-term liabilitiesLoans and credits00Accounts payable for goods, works, services73 89830 857Short-term settlement liabilities: with the budget17 27621 789for off-budget payments7986719for insurance65903506for wages89426120with participants0412Other current liabilities012 437Total for section III114 69275 840Balance sheet238 707200 246

Table 2 - Extract from the income statement of Intersvyaz JSC for 2007 tons, rub.

Report items Amount12 Income (revenue) from the sale of products (goods, works, services)67 224 Value added tax11 204 Net income (revenue) from the sale of products (goods, works, services) 56 020 Cost of sales of products (goods, works, services) 26 413 Gross profit29 607Other operating income1,827.6Administrative expenses9,231.3Selling expenses1,250.7Other operating expenses1,345.6Financial results from operating activitiesProfit19,607Financial results from ordinary activities before taxProfit19,607Income tax from ordinary activities6,305.4Financial results from ordinary activitiesNet profit13,301.6ele operating expenses copsMaterial expenses6,025 Labor costs7,899 Social security contributions3,357 Depreciation and amortization4,955 Other operating expenses1,000 Total23,236 Calculation of share profit ratios Average annual number of ordinary shares 10,000 Adjusted average annual number of ordinary shares 10,000 Net income per ordinary share1.33016 Adjusted net income income per ordinary share1.33016Dividends per ordinary share0 .8646

) Let's make a condensed balance sheet and a profit and loss statement (Table 3, Table 4).

Table 3

Indicators At the beginning of the year At the end of the year 123 ASSETS. Non-current assets121 478118 342II. Current assets, incl. Equity capital116 605124 406 including retained earnings1022314879II. Short-term and long-term liabilities, incl. Table 4 - Condensed income statement of Intersvyaz JSC, rub.

Report items Amount12 Income (revenue) from sales of products (goods, works, services) 67,224 Value added tax 11,204 Net income (revenue) from sales of products (goods, works, services) 56,020 Cost of sales of products (goods, works, services) 26,413 profit 29,607Other operating income 1,827.6Other operating expenses11,827.6Profit before tax19,607Income tax 6,305.4Net profit 13,301.6Dividends per ordinary share0.8646

) Calculate analytical indicators to determine the rate of economic growth of JSC.

The share of reinvested profits in net - this is the reinvestment ratio. This ratio shows the share of net profit aimed at business development. The maximum value of this indicator is -1, the minimum -0.

where RE - reinvested profit; - net profit.

In our case, net profit NR = 13301.60 rubles. Reinvested profit RE is net profit minus dividends, dividends are paid in the amount of 8,646 rubles (0.8646*10000=8646), then RE = 13,301.60 - 8,646 = 4,655.60 rubles. The share of reinvested profit in net income will be:

That is, the share of net profit that is aimed at business development is 0.35>0.

Return on equity is calculated by the formula:

where NP - net profit;

The average value of own capital.

This indicator shows how effectively

The enterprise received 10.69% of income per unit of equity capital.

We will find the economic growth rate using the formula:

Find the rate of growth that the firm can achieve and maintain without increasing its leverage. Where is the coefficient of sustainable or balanced growth. = 0.1069 * 0.35 = 0.039≈4%

Therefore, the growth that the firm can achieve is 4%. The maximum rate of sustainable growth is achieved with the full reinvestment of profits in the business, i.e. at RR=1.

or 11.97% is the maximum level of production growth for Intersvyaz JSC.

) We will draw up preliminary forecasting reports and determine the required amount of attraction of additional resources.

It is planned to increase the volume of production by 1.5 times, then the income from the sale of products and cost items will also increase by 1.5 times. As a result, the original income statement forecast can be obtained by adjusting it for the projected growth rate of 1.5 (Item *1.5).

Table 5 - Forecast of the income statement of Intersvyaz JSC

Report items Amount Plan 123 Income (revenue) from the sale of products (goods, works, services) 67 224100 836 Value added tax 11 20416 806 Net income (revenue) from the sale of products (goods, works, services) 56 02084 030 Cost of sales of products (goods, works, services ) 26 41339 619.5 Gross profit 29 60744 410.5 Other operating income 1 827.62 741.4 Total expenses 11 827.617 741.4 Profit before tax19 60729 410.5 Income tax 6 305.49 458.1 ) 13 301.619 952.4 Annual average number of ordinary shares10,00010,000Adjusted net income per ordinary share1.330161.9952Dividends per ordinary share 0.8646 0.8646Dividends (DIV) 8,6468,646

Since the enterprise uses all capacities and the structure of assets optimally corresponds to the volume of production, the “Assets” section of the forecast balance can be obtained similarly to the forecast of the income statement, multiplying its items by 1.5.

Forecast of the "Asset" section of the balance sheet of Intersvyaz JSC, rub.

Table 6

ACTIVE At the end of the yearPlanChangeI. Non-current assets (IA)118 342177 51359 171II. Current assets including81 904122 85640 952ireceivable:4648169721.523240.5inventories746511197.53732.5cash16948254228474Balance200 246300 369100123

We received that Intersvyaz JSC needs to attract 100,123 rubles. funds to increase production by 1.5 times.

Short-term sources of financing, dependent on sales volume, will increase by 50%. However, the volume of long-term sources is the result of past decisions and is not directly related to the rate of revenue growth, so their value will remain unchanged. The amount of retained earnings can be determined by the formula: rub.

As a result, the preliminary forecast of the Liabilities section of the balance sheet will take the form:

Forecast for the Liabilities section of the balance sheet of JSC Intersvyaz, rub.

Table 7

LIABILITIES At the end of the year PlanChangeEquity (E)*1.5124 406186 60962 203 including retained earnings (RE)14 87921 862.346 983.34Current liabilities (CL)75 840113 76037 920 including: accounts payable 30 85 746 285.515 428.5 short-term loans00 No change Balance sheet 200 246300 396102123

Determine the need for additional funding.

a) The increase in net assets is: (change in assets - short-term liabilities)

∆NA = ∆A - ∆CL = 100123-37920 = 62203 rub.

b) The amount of internal financing: = NP - DIV = 19952.40 - 8646 = 11306.40 rubles.

c) The need for additional external financing: = ∆NA - IFN = 62203- 11306.40 = 50,896.60 rubles (81.82%)

It can be seen from the calculations that the total need for additional financing to ensure the required growth in production volume (50%) is 62,203 rubles, of which 50,896.6 rubles. (81.82%) must be attracted from external sources.

) According to the condition of the problem, it is necessary to calculate the forecast values ​​of financial reporting indicators, determine the need for funding sources using the appropriate balance model and select financing options from the possible ones:

short-term bank loan -10%;

long-term bank loan 20%;

increase in the authorized capital due to the additional issue of shares.

Let's check the first and second conditions:

Total liquidity ratio:= CA:CL= current assets: current liabilities= 81904:75840=1.08. The condition of the problem is fulfilled by the total liquidity ratio greater than 1.5. This suggests that current liabilities are fully covered by current assets, by 1.08 c.u. current assets account for 1 unit of current liabilities.

Ratio of liabilities to total assets (financial dependence): / A = total liabilities / total assets / A = 75840: 200246 = 0.3787 or 37.87%< 50%. Следовательно 37,87% - доля заемного капитала в активах предприятия, это означает что все обязательства могут быть покрыты собственными средствами предприятия.

Therefore, the conditions for granting a loan are met.

Let's see if the company is creditworthy for this, we will calculate several indicators:

Autonomy coefficient:

Caut. = E:A (Equity: total assets)

Quat.= 124406:200246=0.62 or 62%>50%

The share of own funds exceeds the share of borrowed funds, which means that the enterprise can pay off all obligations with its own funds.

The absolute liquidity ratio (solvency) shows what part of the current debt can be repaid immediately. Calculated as the ratio of cash to short-term liabilities (standard value 0.1-0.30) = 16948/75840 = 0.223 or 22.3%

This enterprise can repay about 50% of current liabilities at the expense of cash.

Leverage ratio (debt to equity ratio)

Kf.r.=ZS:SK=75840:124406=0.61 or 61 kop.

Thus, for 1 ruble of own funds, there are 61 kopecks of borrowed funds.

Indicator of own working capital:

SOS \u003d SK - VA \u003d 124,406 -118,342 \u003d 6,064 rubles.

Normal sources of inventory coverage (NIPZ) \u003d SOS + settlements with creditors + short-term loans \u003d 6,064 + 30,857 \u003d 36,921 rubles.

The type of financial stability is normal, since SOS< запасы и затраты < НИПЗ, т.е. 6 064 < 18 475< 36 921.

Working capital ratio:=COC/ Act.= 6064/81904=0.07

The optimal value of this indicator is 0.1. The indicator characterizes the participation of the borrower with its own working capital in the formation of working capital. Intersvyaz JSC does not have enough own working capital.

Return on assets ratio:

= (net profit / company assets) * 100%

13301.6/200246=0.07 or 7%

According to the results of the analysis of financial stability and solvency of Intersvyaz JSC, it can be concluded that the company has a large share of its own funds, which makes it independent of external sources. But at the same time, the enterprise is unstable, lacks funds, and invests its own funds not in the most mobile assets, i.e. The company is of limited creditworthiness. Since the first and second conditions are met, let's see which of the loans will bring the greatest profit using the effect of financial leverage.

=(1-T)*(ROA-R av.)*D:E , where

Income tax rate; cf. - the average interest on a loan paid by an enterprise for the use of borrowed capital.

24%, ROA= net income: average assets.

13301,6:200246=0,07

If Rav.= 20%, then EFL \u003d (1-0.24) * (0.07-0.2) * (75840: 124406) \u003d -0.062.

If Rav.= 10%, then EFL = = (1-0.24) * (0.07-0.1) * (75840: 124406) = -0.02.

A negative value of the financial leverage differential always leads to a decrease in the return on equity ratio. Therefore, the use of borrowed capital by the enterprise has a negative effect. Therefore, attracting sources of financing through short-term or long-term loans is not beneficial for the enterprise.

Let's consider the third condition for the increase in the statutory fund due to the additional issue of shares.

Share price: 65,000: 10,000 = 6.5 rubles.

It is necessary to issue shares in the amount of 50,896.60 rubles, i.e.:

896.60: 6.5 = 7830 pcs. This is 78.3% of the authorized capital, so this type of financing is also not profitable, because:

additional financing is required for the issue of shares;

there will be a dispersion of shares between investors, the probability of taking over a controlling stake (51%) by another person.

Therefore, none of the types of financing in the amount of 50,896.60 AO is suitable. The maximum growth rate can be achieved with the full reinvestment of net profit, i.e. 11.97%. If the growth rate of Intersvyaz JSC is 11.97%, then the reporting forecast will look like this: (item* 131197)

Table 8 - Forecast of the income statement of Intersvyaz JSC

Report items Amount Forecast 123 Income (revenue) from the sale of products (goods, works, services) 67 22475 270.71 Value added tax 11 20412 545.12 Net income (revenue) from the sale of products (goods, works, services) 56 02062 725.59 Cost of sales (goods, works, services) 26 41329 574.64 Gross profit 29 60733 150.96 Other operating income 1 827.62 046.36 Total costs 11 827.613 243.36 Profit before tax 19 60721 953.96 Income tax 6 305.4 7,060.16Net profit (NP ) 13,301.614,893.8 Average annual number of ordinary shares10,00010,000Adjusted net income per ordinary share1.330161.48938Dividends per ordinary shareDividends (DIV) 8,6468,646

Table 9 - Forecast of the "Asset" section of the balance sheet of Intersvyaz JSC, rub.

ASSETY-end ForecastI. Non-current assets (IA)118 342132 507.54II. Current assets including81 90491 707.91 inventories1101012327.89accounts receivable:4648152044.78inventory74658358.56cash1694818976.68Balance200 246224215.45

Table 10 - Forecast of the Liabilities section of the balance sheet of Intersvyaz JSC, rub.

LIABILITY At the end of the year ForecastI. Equity (E)*1.1197124 406139 297.4 including retained earnings (RE)14 87914893.8II. Current liabilities including: (CL)75 84084 918.05 accounts payable 30 85734 550.58 short-term loans00Balance sheet200 246224 215.45

Calculate the economic growth rate for the forecast obtained

) reinvestment ratio:

According to the income statement forecast, net profit NR=14,893.8 rubles. Reinvested profit RE = 14897.8 - 8 646 = 6247.8 rubles. Then the share of reinvested profit in net income will be: = 6247.8: 14893.8 = 0.4195 or 41.95%

) return on equity ratio: = 14893.8:139297.4=0.1066 or 10.69%

) Then the rate of economic growth under given conditions:

T \u003d (0.1069 * 0.4195): 1- (0.1069 * 0.4195) \u003d 0.047 or 4.7%

Thus, the rate of economic growth and the level of self-financing will increase, but the return on equity will not.

With the existing proportions, the rate of economic growth at the expense of own sources of funds is 4%.

The need for external financing is, according to preliminary estimates, 50,896.60 rubles.

With existing restrictions, this need cannot be fully satisfied, the maximum possible increase in production and sales will be 11.97% using all possible sources.

The rate of economic growth at the expense of own sources (self-financing) will increase and amount to 4.7%. Return on equity will be 10.69%.

CONCLUSION

budgeting planning financial

Budgeting, as a tool of operational financial management, is able to ensure the long-term competitiveness of the company by maintaining the leader's function in reducing costs, in making optimal management decisions, improving the quality of business processes, and achieving strategic goals based on a limited set of funds and resources.

At any operating enterprise, there are objects that are subject to strategic planning procedures, and hence budgeting. Comparison of target indicators with those already achieved to date provides an excellent opportunity to analyze the current situation and make appropriate adjustments to the company's future development plans, based on past results.

When budgeting, one of the tasks is not only planning turnover for certain items and monitoring the achievement of planned indicators, but also determining the reasons for the discrepancy between planned and actual turnover. When conducting a comprehensive analysis of the results of budgeting (for all indicators), it is possible to model with a high degree of certainty the impact of a particular management decision or a set of decisions on the financial activities of the organization.

If budgeting is built and implemented correctly, we can talk about an increase in the overall level of enterprise management efficiency (not only in financial aspects), a significant improvement in the quality of management at all levels. Of course, the practical scope of the company's budget management tool is much wider than financial planning. If implemented correctly, this will become a mainstream management technology.

BIBLIOGRAPHY

1. Andryushchenko A. Statement of budgeting // "Consultant", 2005, No. 23 .-

Burtsev V.V. Through budgeting to effective management. // Financial management, 2007, No. 1.-

Gavrilova P.N. Financial management: textbook /P.N. Gavrilova, E.F. Sysoeva, A.I. Drums - M.: KNORUS, 2010 - 432s.

Karaseva I.M. Financial management: study guide / I.M. Karaseva, M.A. Revyakina / Ed. Aniskina Yu.P. - M.: Omega-L, 2006 - 335s

Kychanov B.I., Khrapova E.V. Financial planning as an element of integrated planning at the enterprise. // Financial management, 2008, No. 5, p. 105.

Lytnev O.A. Fundamentals of Financial Management: Textbook - Kaliningrad: Publishing House of KGU, 2000. - 120 p.

Palamarchuk A.S. Financial plan (budget) // Economist's Handbook, 2007, No. 6. -

Popov A.A. Budgeting as a financial planning tool -

Porshnev A.G., Rumyantseva Z.P., Solomatin N.A. Financial management: Textbook. - Novosibirsk: NGTU, 2001. - 84 p.

Smolsky E.V. Cost and financial result// Finance. Right. Management. -

Financial management: Textbook for universities / G.B. Pole - M.: UNITY-DANA, 2006 - 527 p.

Shchiborsch K.V. Budgeting of activities of industrial enterprises in Russia // Financial management, 2004, No. 2 -

www.financial-lawyer.ru/topicbox/upravlencu/finansovoe_planirovanie/

FEDERAL AGENCY OF EDUCATION OF THE RUSSIAN FEDERATION

Belgorod Engineering and Economic Institute

Department of Economics, Marketing and Management

course project

Subject: budgeting

On the topic of: "Organization of budgeting"

Completed: st-ka gr. EKB-55

Head: G.Z. Akimova

Belgorod 2005

1. Theoretical part: business organization………………3

2. Task………………………………………………………….25

Introduction.

Budgeting- this is a system of short-term planning, accounting and control of resources and performance of a commercial organization by responsibility centers and / or business segments, which allows you to analyze predicted and obtained economic indicators for the purpose of managing business processes.

The budget of the enterprise (Main budget) is a system of interrelated budgets and describes in a structured form the expectations of managers regarding sales, expenses and other business operations in the planning period. It includes two main blocks: the system of operating budgets (planned estimates of the main business processes) and the system of financial budgets. Accordingly, from the point of view of the sequence of preparing documents, the budgeting process can be conditionally divided into two main parts, each of which is a completed planning stage: 1) preparation of operating budgets, 2) preparation of financial budgets.

The 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, operation, reorganization and liquidation, as well as as a result of the formation and change of valuations and proportions of assets and liabilities of the company.

Purpose and task of budgeting.

Intra-company financial planning involves the use of various 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 enterprise 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 should be solved:

Establishment of budgeting objects;

Development of a system of budgets - operational and financial;

Calculation of relevant 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.

Core Budget- is a financial, quantified expression of the marketing and production plans necessary to achieve the goals.

Localbudgets serve as the initial information base for the preparation of the core budget.

The main reason why an enterprise loses a significant part of its income by not compiling the main budget is the lack of reliable information about their customers and markets. As a result, there are difficulties in forecasting the real volume of production and sales of products (services).

From the standpoint of revenue optimization, it is important not only to correctly draw up the main budget for the upcoming 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 actual indicators from 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. In the control process, they collect the necessary information and analyze the results of budget implementation.

The budgeting process is continuous or rolling. Based on the planned financial indicators set for the year, during the current financial planning (before the planning period), a system of quarterly budgets is developed. Monthly budgets are compiled within the framework of quarterly budgets. Such rolling budgeting guarantees the continuity of operational financial planning in the enterprise.

The main idea of ​​the budgeting system is that the key parameters of the economic activity of the enterprise are specified at the level of its individual structural divisions (branches) according to information on the types of income and expenses. To do this, create appropriate responsibility centers: income, expenses, profits and investments. Responsibility center is a set of articles of the enterprise budget (combined according to a common feature), 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 responsibility center manager is responsible for:

Organization of planning and rationing of the set of articles entrusted to him;

Proper planning of relevant budget items;

Control over the implementation of the planned parameters of budget items;

Decision making but elimination of deviation of planned items
budget from the actual parameters (if such deviations
exceed 5%).

Compared with 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 mood
collective;

Allows you to improve the process of resource allocation;

Helps lower-level managers understand their role in the enterprise;

Monthly planning of budgets of structural subdivisions provides users with more real information about 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
the cost of working time of personnel of financial and economic
enterprise services;

Allows you to spend money more efficiently
__________________________________________________________

1. [source #3]

enterprises, which is especially important in conditions of cash shortage;

It serves as a tool for comparing achieved and desired results.

It should be borne in mind that when implementing a budgeting system, an enterprise may experience 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;

Desire to get more resources for successful implementation
budget;

Dissemination of false information about budgets through informal channels, etc.

However, these difficulties are not of an objective nature and are quite surmountable in the process of introducing a new system of 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 conditions of a shortage of funds. Comparing the actual results with the parameters of the budgets, it is possible to establish which expenses require special control and due to which factors it is possible to increase the income of the enterprise.

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 departments of the enterprise and ensuring the harmony of their development;

The need to bring 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 forward planning process. The process of compiling the annual budget involves specifying it in a quarterly (monthly) breakdown of indicators. If there is no annual budget, day-to-day business problems may tempt the manager to abandon planning for future operations.

Drawing up an 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 safeguards against ill-conceived hasty decisions that pose a danger to the enterprise.

With the help of budgets, the activities of various departments can be coordinated and brought together. In the absence of general leadership, each manager can make his own decision, believing that it is in the best interests of the economic entity. In some cases, the interests of one leader 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 such study, to 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 properly drawn up budget contributes to the coordination of various types of activities of the enterprise and ensures the consistency of the actions of all its structural divisions. The budget can be a useful tool for influencing the work of managers, encouraging them to act towards the achievement of the main goal of the enterprise.

The budget expresses those parameters (revenues, expenses, profits, etc.), in the achievement of which, under certain conditions, the heads of departments (branches) may be interested. However, budgets can cause inefficiency and conflict among leaders.

If 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 more of an order, then its execution may cause opposition from the staff and do more harm than good.

The budget helps managers in the management and control of activities in the division of the enterprise for which they are responsible.

By comparing actual results with plans for various types of spending, managers can determine which ones are not in line with the original plan and therefore require their close attention. This process allows you to establish a system for controlling costs by deviations, when the efforts of the manager are concentrated on indicators that significantly exceed the budget values.

When investigating the reasons for rejection, managers need to be aware of disadvantages such as low-quality material purchases, mandatory compliance with the installation norm and the shipment transit norm. The work of the head is often evaluated by success in the execution of the budget. Some firms reward their employees based on their ability to meet hard-budget targets, or give them promotions based on budget performance. In addition, the leader can evaluate his own abilities.

The budget is a useful tool for informing managers about how effectively they are fulfilling their responsibilities in achieving the objectives of the plan. The firm will function effectively only if complete and reliable information is available. 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 the execution of the budget, which ensures his personal responsibility for the implementation of planned indicators. With the help of the budget, top management communicates its intentions to lower levels in such a way that all employees clearly understand these intentions and coordinate their actions. Information is transmitted not only through the budget, a lot of vital information is received in the process of its preparation. Budget formation and execution procedures serve several purposes, some of which may conflict with one another.

The budgeting system in any enterprise consists of two key subsystems:

Budgets of structural divisions compiled by responsibility centers (financial accounting centers);

End-to-end (consolidated) budget characterizing the activity
enterprises in general.

The system of budgets is also subdivided into operational and financial budgets.

The operating budget includes a 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; overhead and general business 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 estimate of income and expenses, as well as their structure for the coming period. The revenue and expenditure parts of the budget are calculated separately, and then summarized in a single table. The revenue part 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 expenditure part consists of current expenses associated with the production and marketing of products; tax expenses; 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 the planned return on sales and equity
is, in the opinion of management, at an insufficient level (the ratio of budget surplus to sales 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:

♦ income budget from product sales (it is necessary
also for the development of the income and expenditure budget);

♦ Miscellaneous income budget;

♦ materials procurement budget;

♦ salary payments budget;

♦ budget for payments for general production expenses;

♦ budget for payments for general business expenses;

♦ budget for tax payments (including indirect taxes);

♦ the budget of payments for financial activities;

♦ consolidated cash flow budget.

Conditions for creating a system of effectivebudget 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 should have organizational, informational and personnel support, as well as the possibility of prompt 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 compiled 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 evaluating the performance of structural units (shops, departments, services, etc.).

The main problems of budgeting:

The management concept is not clearly defined;

There is no managerial (production) accounting;

The basis of budgeting is the actual accounting data;

1. [source #5]

Accounting, analysis, planning and control procedures are not formalized, the responsibility of officials is not delineated;

The principles of centralization and decentralization are not defined.

Therefore, for the successful formation and functioning of the budget management system, it is necessary to comply with a number of mandatory conditions.

1. It is advisable to create a new organizational structure for enterprise management, which determines the rights and responsibilities
heads of departments, as well as the structure of business processes that affect the speed and quality of intra-company planning.

2. Mandatory integration of budgeting with organizational and
information structures of the enterprise and the system for executing business processes (production of goods). The most preferable approach is when the organizational structure is fixed 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 performance of the enterprise as a whole and its divisions (branches).

3. For successful planning, it is advisable to standardize credentials for the purpose of their sharing by all structural divisions (business centers, responsibility centers, etc.).

To this end, it is necessary to develop the following internal regulatory documents:

Regulation on the conversion and consolidation of accounting data;

Chart of accounts for tax accounting;

Regulations on the formation of tax reporting;

Regulations on the system of management accounting and reporting;

Classifier of primary elements of production logistics identified in time and space;

Classifier of primary planning and accounting units of budget management, etc.

4. Clear structuring of all processes, distribution of functions and responsibilities of specific persons for the results of economic activity of structural divisions is necessary. Compliance with this condition allows you to automate all the operations necessary for this and significantly simplify the budgeting system.

5. The introduction of budgeting should be based on a qualitative financial analysis, forecasting market trends, taking into account the factors affecting the sale of products, and consequently, financial results. To this end, the following work needs to be done:

Compile a set of analytical indicators for departments;

Ensure their comparability in time and space;

Define a set of standard analytical forms.

6. The introduction of budgeting is accompanied by the development of an accounting policy (selection of financial accounting centers (FAC), accounting systems, typologies of accounting entries that can be used to describe business situations, procedures for consolidating information and determining financial results). In order for accounting data to be suitable for financial analysis and control, it must be supplemented by a management accounting system, which will allow for a reliable allocation of costs to DFSs, business processes, etc.

7. Ultimately, the final outline of budgetary management should include:

Formulation of 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;

Making decisions on the regulation of deviations (saving
positive deviations and elimination of negative ones).

In any case, the management of the enterprise faces a difficult task: to skillfully introduce budgetary management systems, while simultaneously solving two problems - organizational and technical. A prerequisite for the formation of a budgeting system is the development of a regulation that determines the sequence of building budgets, since each of them requires not only coordination with related budgets, but also with other enterprise management functions.

budgeting period.

Preparations for the development of next year's budgets should begin a few months before the start of this year. If the budget is based on a calendar year, it is advisable to start preliminary development on October 1st. The budget can cover any time period. However, the larger the time lag expresses the budget, the less reliable it is. The 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 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 non-budgetary 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, the supply of energy resources, etc.) and can significantly affect consumer demand, the supply of material resources and the state of stocks at the enterprise.

A detailed budget for each structural unit (branch, responsibility center, etc.) is usually developed for a certain period. The annual budget can be divided into twelve monthly. 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 the following 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.

In summary, rolling budgets ensure the continuity of planning—not a one-time event that happens once a year, but a sequential process where managers feel the need to look ahead and revise plans for the future.

Moreover, it is likely that actual results will be compared with more realistic targets as operational budgets are systematically reviewed and adjusted.

Since budgets are reviewed at the end of each quarter or month, there is a danger that managers will not pay enough attention to the preparation of budgets for the next period, because they know that they may change during the quarterly review process. However, this negative factor is blocked by the need to comply with the official duties of the instruction at each enterprise, which is provided for in the relevant provisions on budget management.

The continuity of budgeting is largely ensured through the use of various computer technologies. They help you quickly and accurately perform financial calculations, make the necessary comparisons and constantly monitor 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.

Budgeting technology.

The budget is a highly effective tool for intra-company financial planning and allows you to quickly coordinate and evaluate the activities of the structural divisions of the enterprise.

With the budget begins the process of setting specific objectives for business activities. Deviations from planned indicators in the process of executing short-term budgets serve as a signal to managers to take effective measures to eliminate negative deviations. The financial management procedures include: budgeting, borrowing and placement of temporarily free cash resources in the financial market. In relation to budgeting, the last two procedures occupy a subordinate position. This is due to the fact that without clear management and control of cash flows within the enterprise, actions to attract and place funds may turn out to be ineffective and will not lead to strengthening the financial stability and solvency of a business entity. The budgeting process should be standardized with the help of budget forms, instructions and procedures developed by the enterprise itself.

At the stage of initial budget preparation, management of the budgeting process usually begins with the appointment of a budget director. He is responsible for the preparatory process, standardization of planning forms, data collection and analysis, information verification and reporting. The director of budget is usually appointed financial director (vice president for economics and finance). He acts as a staff expert and coordinates the activities of departments and services.

The Budget Committee is an advisory group composed of senior management, which may include external advisers. This committee is a permanent body that carefully reviews strategic and financial plans, makes recommendations, resolves disagreements and promptly makes adjustments to the company's activities.

The budget guide 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.

At the initial stage, the managers responsible for the implementation of the targets are required to prepare budgets for the areas of activity for which they are responsible. The budget preparation process should be bottom-up. This means that the budget starts at the lowest level of management and is improved and coordinated at a higher level.

This approach helps the heads of departments (responsibility centers) to participate in the preparation of their budgets and the likelihood that they will strive to achieve the planned goals. There is no unambiguous method for quantifying a specific budget item. Accounting data can be used as a starting point for budgeting, but this does not mean that it is developed on the assumption that if an event took place in the past, then it will also happen in the future.

It is advisable to accept changing conditions in the future, and information about the past can be useful in future work. In addition, managers can follow the instructions of senior management when drawing up their budgets. For example, special instructions for changing prices for purchased materials and services. In production activities, you can focus on standard costs as the basis for calculating the cost of manufactured products, provided for in the budget. When preparing budgets, managers should take into account the influence of the following factors:

Type of products and services;

The number of employed workers and their qualifications;

Possibilities of production and capacity limitations;

Stability of the production cycle;

prices for purchased material resources and energy;

Selling prices for finished products (services);

Availability of production stocks and the need to replenish them;

Rates of turnover of current assets (for example, accounts receivable);

The cycle of production;

Technological aspects, including the presence of physically and morally worn out equipment;

Quality control of products 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 the ability to predict ;

Has clear channels for the movement of information, distribution of powers and responsibilities;

Contains clear, detailed and reliable information about the activities of the unit (branch);

Provides the ability to compare indicators in the historical aspect;

It is supported by all stakeholders within the enterprise and, above all, by its management.

At the stage of discussing the budget with higher management, heads of departments are required not only to draw up their budgets, but also to submit them for approval to a higher manager. He, in turn, combines all the 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 for achieving them in descending order - from top to bottom;

2) preparation of the budget in ascending order - from the bottom up;

3) approval of the budgets drawn up again in descending order from top management to heads of departments.

Important in the preparation of budgets is a clear delineation of the functions and responsibilities of managers of structural divisions of the enterprise. So, for example, a purchasing manager plans purchases in physical and cost terms. Procurement can be planned in the context of individual suppliers. The production manager projects the future cost of producing a product and the cost per product. He is obliged to draw up a schedule for the release of products so that the production process is not interrupted. The production manager is responsible for the quality of products, the increase (decrease) in production volumes, finding the optimal mode for organizing work, operating, repairing and replacing equipment. He is also obliged to determine the permissible level of marriage on the basis of the practical experience of past periods. The quality manager evaluates the quality of products, identifies the reasons for the decline in the quality of products and forms requirements for quality control. The sales manager projects future sales volumes of goods and services, selling prices and profits, taking into account market segments and buyers. He must also calculate the related costs: labor, commissions to intermediaries, promotion and transportation of goods, entertainment expenses, etc. The credit control manager is responsible for increasing sales by attracting credit (if justified) while reducing bad debt buyers. He is obliged to wait for the growth of sales and at the same time - the reduction of overdue receivables.

After bringing all the budgets in line with the requirements of the financial, pricing, supply and marketing policy of the enterprise, it is necessary to bring them into one budget and submit them to the top management for approval. Previously, the budgets are discussed by the executive and their immediate supervisors, and after the removal of controversial issues, they must be accepted by both parties. Therefore, the indicators included in the budget are the result of discussion between the persons responsible for this budget and its head. It seems important that the budget preparers participate in the adoption of its final version, and the head does not revise the articles of this document without taking into account the argument of subordinates.

Care must also be taken to ensure that those responsible for setting the budget do not deliberately seek to accept easily achievable targets or underestimate budget figures in the hope that achieving the final budget is an easily achievable target.

Discussion is a very important process of preparing a budget, and during this process it is possible to determine whether it will become a really effective management tool or just a technique. If the head of the unit (responsibility center) has succeeded in establishing trust with his subordinates, then the discussion process will allow significant improvements in budget preparation.

At the stage of coordination and analysis of the considered budgets, the following work is carried out. As the budget moves from the bottom up - from the lower manager to the higher one - in the process of discussion it is advisable to study the parameters of the budget. Such a study may show that some budgets are not balanced with other budgets and need to be seriously adjusted. At the same time, other conditions, restrictions and plans that the head of the unit does not know about or cannot influence them must be taken into account.

So, it is advisable to start budgeting with the development of operating budgets - primarily from the sales budget. On the basis of this planning document, the budgets of production, supply and procurement, operating, marketing and other activities are formed. In parallel (or after the operational budget), they draw up a budget for the movement of funds (Cach - Flow). 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 the development of an income and expenditure budget and a balance sheet budget. The first of them allows you to manage the most important financial result of activity - profit, and the second expresses the obligations and investments of the enterprise for the main items of assets and liabilities.

Thus, the final result of the budgeting process is the development of three key budgets: the revenue 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.

Accounting for 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 budgeting process, one can only assess risks and take measures to neutralize them. During the budgeting process, it is necessary to establish:

1) types of risks affecting the implementation of the budget (for example

income and expenditure budget);

2) a calculation algorithm that allows assessing the level of risk;

3) calculate the probable damage (loss of part of the income or profit
or) 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 market conditions, 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, default by suppliers and buyers, unsatisfactory work with debtors, large financial investments in the authorized capital of other enterprises without a corresponding return on them, etc.).

In budget management, risks are classified into two groups:

1) the risk of loss of income;

2) the risk of increasing 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 income and expenses, 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 enterprise in connection with the onset of adverse circumstances.

To protect against commercial risk, the following standard methods are used:

1) risk avoidance (rejection of dubious partners, search for
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, diversity 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 make settlements between suppliers and contractors, to make payments to the budget, settlements with credit institutions, to pay salaries, bonuses to employees, and to make other types of payments.

Cash flows 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 basis of the enterprise's funds are the economic relations of the enterprise with various organizations and institutions and economic relations related to the implementation of works, services and other business operations.

One of the main conditions for the normal operation of the enterprise is the availability of funds, which can be assessed by the analysis of cash flows.

There are the following cash flows:

1. Cash flow from current activities

2. Cash flow from investing activities

3. Cash flow from financing activities

For any area of ​​activity, cash flows reflect both the receipt of funds (cash inflows) and their expenditure (cash outflows).

The cash flow statement shows the impact of profitable activities on cash resources and what assets are acquired and how they are financed. It helps to highlight more clearly the distinction between net income and cash generated from business activities.

The main source of information for analyzing cash flow, the relationship with profit is the balance sheet (form No. 1), income statement (form No. 2) and cash flow statement (form No. 4), the content of which can be summarized by the following model :

d o + d +∆ + d -∆ \u003d d 1,

d o and d 1 - cash balances of the enterprise at the beginning and end of the reporting period;

d +∆ and d -∆ - inflow and outflow of funds for the period.

The structure of cash flow can be represented in the relevant models:

d + ∆ = d + ∆ current + d + ∆ inv + d + ∆ fin,

d -∆ = d -∆ current + d -∆ inv + d -∆ fin,

d +∆ current and d -∆ current - 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

d + ∆ \u003d 117040 + 445 + 1590 + 89 + 20000 \u003d 139164 thousand rubles.

d -∆ \u003d 125373 + 15 + 17000 \u003d 142388 thousand rubles.

Balance at the beginning of the reporting period = 5269 thousand rubles.

5269 + 139164 - 142388 \u003d 2045 thousand rubles

Balance at the end of the reporting period 2045 thousand rubles.

2004

d +∆ = 219886+280+4575+56+8+290+57000+72153 = 354248 thousand rubles

d -∆ \u003d 234756 + 59000 + 59000 \u003d 352756 thousand rubles

Balance at the beginning of the reporting period = 2045 thousand rubles.

2045 + 354248 - 352756 = 3537 thousand rubles.

Table 2.2.

Index

2003, thousand rubles

Specific weight, %

2004, thousand rubles

Specific weight, %

Growth rate, %

Cumulative inflow across all activities

Cumulative inflow from current activities

Cumulative inflow from investing activities

Cumulative inflow from financing activities

From table 2.2. it can be seen that in 2004 there was a significant increase in the receipt of funds from investment activities in relation to 2003. Cash inflows from other activities are also noticeable and significant. Receipts from current activities occupy the largest share in the total amount of cash receipts, the share 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.

Index

2003, thousand rubles

Specific weight, %

2004, thousand rubles

Specific weight, %

Growth rate, %

Cumulative churn across all activities

Cumulative outflow from current activities

Cumulative outflow from investing activities

Cumulative outflow from financial activities

Analyzing table 2.3. the following conclusion can be drawn: in 2004, the enterprise provided loans to other organizations for an amount three times higher than in the previous year. The most significant outflow of cash is observed at OAO Belgorodstoydetal from 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 decreased significantly. In connection with the repayment of the loan amount, the outflow from financial activities increased.

Here are the indicators of working capital and net assets of OAO Belgorodstroydetal.

Table 2.5.

Indicators of working capital and net assets of OAO 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 (n1-n3)

6. Sales volume

7. Turnover of net assets, % (n6/n5)

8. Operating income (Revenue - Cost - Selling expenses - Administrative expenses)

9. Return on net assets, % (n8/n5)

10. Equity

11. Net profit

12. Return on equity, %

Despite the increase in the value of net assets, in 2004 there was an acceleration in the turnover of net assets due to an increase in sales volumes, and the profitability of net assets also increased significantly due to an increase in 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 exist at all. The main criterion for evaluating 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, and the effect of financial leverage is calculated accordingly by multiplying it by the return on net assets, taking into account the adjustment factor for loans and taxes.

Let us determine the effect of the financial leverage of OAO Belgorodstroydetal in the implementation of the project for the acquisition of a magnetic activator of water systems in order to improve product quality and increase profits.

The company 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. The volume of production of ready-mixed concrete\u003d 33247 m 3. Cost price 1 m 3 =
RUB 1,330 thousand Price 1m 3 \u003d 1.756 thousand rubles. Bank interest on a loan = 18%. Income tax rate = 24%.

1) Determine the adjustment factor for credit and taxes.

Correction factor for credit and taxes = [(Profit from sales of products - Value of credit funds * (1 + Bank rate)]*(1 - Tax rate / Profit from sales of products)

Correction factor for credit and taxes = [(33247*1,756 – 33247*1,330) – 1951,33*1,18] * (1-0,24) / (33247*1,756 – 33247*1,330) = 0,88

2) Leverage = (Equity + Amount of loan funds) / Equity

Financial leverage characterizes the ratio of all assets to equity capital.

financial leverage = (153913+1951,33) / 153913 = 1,013

3) Net asset turnover for the project period = Sales proceeds / Net assets

Net asset turnover for the project period = (33247*1,756) / 149870 = 0,39

4) Calculate the return on sales.

Return on Sales = (Sales Profit / Sales Revenue)

Profitability of sales = (33247*1,756 – 33247*1,330) / (33247*1,756) = 0,2426 (24,26%)

5) The effect of financial leverage is an increment to the return on equity obtained through the use of a loan, despite the payment of the latter.

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 = Financial Leverage * Credit and Tax Adjustment Factor * Net Asset Turnover * Return on Sales

The effect of financial leverage = 0,88*1,013*0,39*0,24 = 0,0834 (8,34%)

6) Determine profit before and after tax.

Profit before tax = Profit - Interest on a loan

Reinvested profit is the profit that goes to the accumulation fund, and then to production.

Profit before tax\u003d (33247 * 1.756 - 33247 * 1.330) - (1951.33 * 0.18) \u003d 13811.98 thousand rubles.

Profit after taxes= 13811.98 * 0.24 = 3314.88 thousand rubles.

Profit after taxes, interest and loan repayments= 3314.88 - 1951.33 = 1363.55 thousand rubles.

This profit may be reinvested profit.

7) Calculate the reinvestment rate.

Reinvestment ratio = Reinvested profit / Net profit

Reinvestment rate = 1363,55 / 3314,88 = 0,41

8) Let's define the economic growth of the enterprise.

The economic growth of an enterprise shows the maximum sales growth that an enterprise can achieve without changing other operating indicators.

Enterprise economic growth = Reinvestment ratio * Financial leverage effect * Equity 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 is the tax rate

Since the return on net assets is higher than the weighted average cost of capital, therefore Belgorodstroydetal OJSC is 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 the enterprise, budgeting and monitoring its execution 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 needed.

The first step in the difficult path of building a budgeting organization system can be the theoretical and practical training of enterprise specialists on the issues of setting and automating budgeting. For these purposes, a special training program has been developed.

What does the company get as a result? The financial flows of the company become transparent for the head. They have the ability to prioritize payments; monitor 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 items; 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 V.P., Theory of accounting: account. allowance.-M.: ICC "March", 2004.

2. Bakaev A.S., Bezrukikh P.S., Vrublevsky N.D., Accounting - M.: Accounting, 2002.

3. Bochkarev V.V. "Commercial budgeting" - St. Petersburg: Peter, 2003.

4. Burtsev V.V., Financial management: journal 01/2005. Through budgeting to effective management - article, p.33.

5. Bogataya I.N., 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 A.I., Accounting theory. - St. Petersburg: Peter, 2005.

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You will need

• initial data for calculation (resources, sources of funds, directions of expenditure of funds, accounting data).

Instruction

The first thing to do is to forecast the volume of sales. Usually this statement is consistent with all market planning, except for those enterprises that are limited in production capacity and can sell as much as they have made. In this case, we are talking about the availability of production capacity or equipment throughput.

Ultimately, the budget flows into the budget of expenses, so plan a direct (piecework), which depends on the volume of production. The preparation of such a budget also rests on the availability of a tariff-qualified reference book.

note

Based on the planning process, when preparing for budgeting, you should be familiar with the following questions:

What resources will be required to complete the tasks;
- Where will the funds come from?
- how the funds will be raised;
- how the organization will be able to make donations or gratuitous services.

Helpful advice

The budgeting process needs to take into account those external factors that could negatively impact efforts. Therefore, alternative plans should be developed and a variety of options considered.

Sources:

• Promotion budget calculation methods

Position about organizations- a document on the basis of which the activities of state and municipal non-profit organizations are carried out, which perform their functions at the expense of the relevant budgets. These are, first of all, the organs of power and administration. This document defines the status organizations, tasks and functions that it is called upon to perform, the order of activities, rights and responsibilities. The legal status of this document is defined in Article 52 of the Civil Code of the Russian Federation.

Instruction

Determine what type of document you need to develop for your: typical, exemplary or individual. Model and exemplary provisions subordinate organizations, branches and representative offices that are of equal importance in the hierarchy of bodies and carry out the same. Individual Regulations on organizations are developed on the basis of typical and exemplary.

Position about organizations draw up on standard sheets of A4 paper, provide in the upper right field of the first sheet the stamp of approval by a higher organization, it must subsequently be signed and certified by the appropriate seal. Write under it in the middle the name of the type of document, it should be one with the title to the text.

What are the theoretical foundations of budgeting and financial planning? How to implement a budgeting system using the example of an enterprise? Where can I get help in organizing budgeting at the enterprise?

Money loves an account. And business assets - especially. Every entrepreneur must know what the budget of his enterprise is and what it is spent on. Otherwise, it will simply go bankrupt and fly out into the pipe. Proper distribution of company finances is called budgeting.

About, how to set up budgeting and how financial planning helps to increase business income, I, Denis Kuderin, an expert on economic issues, will tell in this article.

We read to the end - in the final you will find an overview of professional companies that will help organize budgeting at the enterprise on favorable terms for the customer.

1. What is budgeting and financial planning in an enterprise

The family has a budget, the school, the city, the state.

And of course, every commercial enterprise has it. Without a budget, it is impossible to launch a project and organize its work.

Budgeting- This is budget management, an integral part of financial planning. With the help of budgeting, the resources and assets of an economic entity are distributed over time.

Budget is not an abstract concept, but specific document, in which the company's goals and capabilities are quantified. At large enterprises, budgeting and its management are carried out by special structures - financial departments and financial responsibility centers (CFDs).

There is no single budgeting model - individual schemes are developed for each enterprise, taking into account the specifics of the company and its financial capabilities.

Example

For a small Babyboom company that sells Japanese baby diapers and has three employees, budgeting comes down to a simple drawing up an income-expenditure budget. This is quite enough - too detailed study of the financial plan is not required.

At a large oil refinery, budgeting deals with several departments, there are 10 independent CFDs, in addition, the company's affairs are periodically audited by an external consulting firm.

The level of complexity of budgeting directly depends on the size of the business

is an essential part of economic planning and financial management. With its help, the current and future economic activity of the object is determined.

The main tasks of budgeting:

• optimize costs;
• coordinate the work of different departments of the enterprise;
• identify which areas need further development, and which ones are better to abandon altogether, since they bring losses;
• analyze the financial activity of the enterprise as a whole;
• make a financial forecast;
• to strengthen discipline in the company and increase the motivation of employees.

The period for which a specific budget is developed is called budget period. Usually it is 1 year. Professional financial planning and management are the most important components of successful work.

Important terms on the topic

Article- part of the budget for which business transactions of the same type are planned and accounted for. For example, the salary of employees, maintenance of the territory of the enterprise, the cost of transporting products, etc.

business transaction- a single event in the work of the enterprise, causing the cost of resources or, conversely, the receipt of money, goods, material values.

Budget of income and expenses ()- financial results of the enterprise.

As a rule, the need for organizing professional budgeting in an enterprise arises when the number of company employees exceeds 50-100 people.

It is becoming more and more difficult to manage financial flows “the old fashioned way”, profits are becoming less predictable, management is losing the financial “pulse” of the company and is not aware of where and what the money is going for. It is closely connected with budgeting: in fact, these are two sides of the same process - the economic management of an enterprise.

2. What functions does budgeting perform in an enterprise - 7 main functions

The basic task of budgeting is accounting and development of financial solutions. Analyzing the current situation will help make better decisions in the future, while comparing the plan with actual results will reveal the strengths and weaknesses of the business.

Experts highlight 7 local budgeting functions. Let's deal with them.

Function 1. Financial planning

Budgeting is, first of all, an ongoing planning tool that helps to find the most rational and profitable options for using the available resources of the enterprise.

There is no business without a plan. This is the basis for forward-looking and reasonable management decisions. Financial planning answers the questions: how much money will you need to run a business? Where exactly will they go?

There are several types of planning: strategic(for the long term), tactical(for the medium term - from one year to 5), operational– planning of current activities. Comprehensive financial accounting ideally covers both long-term and immediate goals of the enterprise.

Function 2. Monitoring and evaluation of performance

This function is no less important than planning. Even the best plan will be useless if you do not organize the control of its implementation and subsequent analysis. Comparing the facts with planned indicators, they conduct an objective assessment of the results of work at all its stages.

Professional control will increase the return on work, prevent unnecessary expenses and help identify the most profitable lines of business.

Function 3. Evaluation of the work of managers

The managers of the company are engaged in the implementation of ideas and plans into practice. Budgeting Helps evaluate the results of their work and serves as the basis for material incentives for key employees.

Function 4. Motivation of employees and managers

In the budgets of individual departments and the entire organization as a whole established guidelines for managers and employees. Budgeting should motivate the employees of the enterprise to achieve the target results.

Thus, the payment of bonuses and bonuses to employees can and should be tied to budget indicators.

Function 5. Formation of the communication environment

The employee has the right and must know exactly what management wants from him. If the budget plans and goals of the company are a secret for ordinary employees, then their productivity decreases, their involvement in work is lost, and the level of motivation drops.

Competent managers introduce the principle of combining ascending and descending information flows at the enterprise. Grassroots units report everything to higher authorities, but managers also keep employees informed about the financial affairs of the company.

Function 6. Coordination between departments

Departments, workshops and branches of a large enterprise must coordinate their activities with each other within the framework of budgeting for well-coordinated clear work.

It is clear that some structures deal with the company's expenses, while others, for example, the sales department, are busy forming the revenue side of the budget. All the more important match revenues with costs and optimize both directions in accordance with the basic goals of the enterprise.

Function 7. Training of managers

It happens that the managers of the enterprise meet the formulation of budgeting with hostility. They perceive this process as an additional responsibility that management wants to put on them, and they are also afraid that budgeting will reveal all the shortcomings of their departments.

In such situations, it is necessary to explain the need for budgeting to each responsible person. Compromise - invite an experienced consulting firm, which will introduce, set up and launch a new budgeting system, and at the same time train employees in effective financial management methods.

Modern financial accounting is inconceivable without process automation. Now many enterprises are already working (and quite successfully) the latest automated budget management programs. More about them in one of the following sections of the article.

3. How to implement a budgeting system using the example of an enterprise - 5 main stages

So, we know what budgeting is and what tasks it performs. Now let's look at how to organize a budgeting system in practice.

The instruction below is not a rigid scheme, but a general algorithm. The implementation of the system is always consistent with the specifics of the organization, its resources and scale.

Stage 1. Designing the financial structure

First, develop the principles of budgeting for your enterprise. The system cannot be implemented blindly.

To create a financial structure project, you need:

• study financial and economic documentation;
• analyze the mechanisms of interaction between departments;
• review current financial accounting rules and standards;
• prepare personnel for the introduction of a new budgeting system at the enterprise.

Then it creates budgeting model, which will control and distribute expenditure items and financial flows. In accordance with the types of financial transactions, CFDs are formed (I remind you that these are the so-called Financial Responsibility Centers).

The number of centers depends on the scope of the enterprise and its scale. CFDs are combined into a single structure, the work of which is coordinated by responsible persons.

Stage 2. Creation of the structure of budgets

At this stage, the structure of budgets is formed in accordance with the centers of financial responsibility.

Examples of budgets in a large enterprise:

• sales budget– calculates the volume of sales in general and for individual items;
• production budget– calculation of production volumes in accordance with demand, sales volume and the amount of finished products in warehouses;
• procurement budget- how much raw materials and consumables will be needed;
• production cost budget;
• tax budget;
• management budget.

This is just an approximate budget distribution algorithm - each company will have its own unique scheme.

Stage 3. Development of an accounting and financial policy

The financial accounting policy is specific rules bookkeeping and production records. These rules comply with the limits set by the budgets.

Happens conservative financial policy, but sometimes aggressive. We are talking about methods of managing resources, investment activities of the company and other business processes.

Example

The largest company in Russia Gazprom adheres to conservative budgeting. The financial policy of the corporation allows it to withstand any economic shocks.

However, conservatism means consistency in actions. For example, Gazprom continues to develop and finance all of its investment projects even in the face of negative market developments. Moreover, the corporation achieves this with the help of its own, not borrowed funds.

Another secret of Gazprom's success is careful control over costs. The financial department of this organization knows when and on what each ruble of corporate assets is spent.

Stage 4. Formation of planning regulations

Responsible persons develop planning regulations, determine the procedures and methods of budgeting. Then create a legal framework which will regulate the financial accounting in the company.

The list of required documents includes: regulation on the financial structure of the enterprise, regulation on the Central Federal District, regulation on budgets, etc.

Companies often face difficulties at this stage. A reasonable way to overcome them is to delegate the development of regulations to professionals. The next section contains an overview of companies that will help not only with documents, but also with the introduction of a budgeting system into the company's activities.

Stage 5. Preparation of the operational and financial budget

The final stage is the preparation of budgets for the planned period. Ideally, you need to conduct a scenario analysis and, on its basis, correct the budgeting system.

What prospects does the system open? She saves time and resources on the preparation of financial documentation and makes the economic activity of the enterprise more transparent. There are fewer unforeseen losses, working capital is sufficient, business profitability is growing, and profits are growing.

The effectiveness of the system largely depends on how the software product chosen by the company corresponds to the specifics and goals of the enterprise. Fortunately, today there are enough universal and convenient programs on the market that are easy to learn and easy to adapt to the desired industry.

Watch an interesting video that will answer the question of why budgeting can be ineffective.

4. Professional budgeting assistance - an overview of the TOP 3 service providers

Do you want to establish budgeting at the enterprise quickly and professionally? Engage experienced professionals from specialized companies.

The expert department of the HeatherBober magazine monitored the service market and chose three most reliable firms specializing in budgeting and financial accounting.

The company was founded in 2003. Today it is the leader in system integration not only in the Russian Federation, but throughout the CIS. The company offers a full range of information systems for business. Employees will help you choose the right system, install, test and put it into operation at the customer's enterprise.

The company has fulfilled several hundred successful projects on the implementation of budget automation and business management. Employees of "West Concept" are specialists of the highest level with many years of practical experience. They will establish overall budgeting at the facility or take over specific structures - the sales department, production or warehouse processes.

The company offers full control and transparency of budgeting, as well as freedom from routine calculations and errors. SoftProm specializes in the installation of unique platforms for budget automation.

Software from this organization is a Russian-made product that combines ease of management with the ability to process enormous amounts of information. The company will develop individual budget model of any complexity, conduct training for employees of the customer company, implement a turnkey budgeting system.

Service company for the implementation of information solutions in business projects. Automation of management, budgeting, and other business processes. ARVO deals with orders from "a" to "z" - analyzes the work of the enterprise, creates a project for automating the budget or management, implements the solution and controls its execution.

5. How to achieve effective budgeting in an enterprise - 3 effective ways

It is not easy to set up budgeting in an organization on your own.

For financial accounting and planning to be successful, follow expert advice.

Method 1: Use automated budget management systems

Without automated systems today nowhere. All companies that keep pace with the era use modern software for budgeting and financial management.

But before putting systems into practice, study their features.

Examples

UPE Universal Platform is a multifunctional logic constructor, report generator and a set of flexible interfaces. The program will simulate a budget of any complexity and greatly simplify financial control at the facility.

1C Corporate finance management- a program that allows you to successfully manage the resources of an enterprise of any size - from a small trading company to the largest holding.

Other programs - plan designer , Microsoft Azure , SharePoint .