The principles of effective budgeting include: Principles of building a budget system

Hello! In this article we will talk about budgeting in an organization.

Today you will learn:

1. Why do you need budgeting?
2. What does the budgeting system include?
3. What is the budget cycle;
4. What does the organization's budget include;
5. How to create a budget for an organization.

Budgeting and its features

In any company, large or small, there is a set of income and expenses. Managing cash flows and planning activities based on current economic indicators are important functions of the company, which form the essence of budgeting.

Budgeting is the process of budget management and includes the preparation of estimates, their distribution and adjustments in accordance with changes that have occurred.

The totality of all income and expenses is the budget, on which the functioning of the entire enterprise depends.

Budgeting is a broad concept that affects not only large companies, but also individual individual. Moreover, the latter can influence not only its own budget, but also act as a driver of economic programs at the state level.

For example, proactive budgeting implies that citizens are free to propose their ideas for spending the state treasury.

It is important to be able to manage cash flows: efficiency this process affects the funds that can be available at the moment without compromising the future.

Budgeting is designed to achieve the following goals:

• Assessment of the company’s condition as of the current date (how effectively the company operates and whether its activities need adjustment);
• Regular planning of activities based on indicators characterizing current activities;
• Approval of plans designed to save money and manage it wisely;
• Efficient use of all available resources (so that they bring maximum profit and costs are as low as possible);
• A detailed study of the basics of investment activity (implementation of this area in order to obtain additional income);
• Review of planned projects for their necessity and possible profit for the enterprise (requirement for project managers - each of them must justify the purpose of implementing a particular area);
• Development and further strengthening of the enterprise’s discipline in general and specifically in financial matters;
• Coordination of all levels of the company to obtain maximum performance results;
• Providing a detailed analysis of all existing costs (cost budgeting allows you to reduce the costs of the enterprise and direct the saved funds to other goals of the company);
• Availability of a proven system for monitoring the execution of assigned tasks to lower levels;
• for the purposes of the organization;
• Compliance with established legislation and accepted contractual obligations.

The list of goals that are achieved through budgeting is quite large, and we can conclude that this process plays a role in the enterprise important role.

It is advisable to carry out budgeting in large enterprises: it is carried out by employees of several departments, whose activities are coordinated by management.

If the enterprise is small and also has a small number of personnel, then you can get by with only brief reports from the manager himself: this will not take much time and will make the process faster and more efficient.

What functions does budgeting perform?

Organization of budgeting is a whole set of measures aimed at increasing the efficiency of financial management.

Each company develops its own tasks that need to be solved by introducing a general control mechanism cash flows. However, budgeting functions have a common focus for any enterprise.

Let's look at what problems budgeting solves.

The main ones include:

• Increase in economic indicators of the enterprise. They will further lead to more efficient work, which will have a positive impact on the budget;
• Assessing the company's performance. The correlation of all cash flows forms a holistic picture of the functioning of the company. Based on the data obtained, plans are formed to adjust and shift the focus of management’s attention in favor of weaknesses companies;
• Setting plans based on current indicators. Planning – important stage on the way to achieving goals. Depending on the current state, you can adjust certain areas of the company and focus them on effectively solving pressing issues. Planning can have both a short-term perspective (for the coming months) and a long-term perspective (for a period of more than 5 years). The optimal period for implementing plans is from 12 months to 5 years;
• Justification of expenses incurred. Each company must have a specific list of costs that will need to be incurred in the near future or in the future. The list of expenses may be planned or not included in possible expenses. Justification of the latter is an important task based on the amount of funds spent and the benefits they brought to the company;
• Introduction special unit to estimate expenses incurred. Each cost must have a useful value for the organization. If there is none, then it is necessary to exclude the expense item from the future period;
• Minimizing potential risks. Movement of streams Money if the level of management is low, they can cause losses, and in order to eliminate or minimize them, it is necessary to increase the degree of involvement of the company in financial matters;
• Personnel performance assessment. If the company's business is going well, then wage-earners perform their functions competently. If there are shortcomings in the work of the company, then it is worth thinking about the level of qualifications of individuals and taking appropriate measures. In this case, a decision is considered about motivating employees, training them, or replacing them with other specialists;
• Establishing a communication environment within the company. The leader sets goals, and managers at the appropriate levels are busy solving them. The quality of work of lower-level personnel depends on how detailed and holistic the information is presented by management;
• Coordination between company departments. Solution global challenges is not decided separately by the manager or his representatives. This issue must be approached together in order to find out all possible solutions, take into account existing opinions and create a holistic picture of reality;
• Personnel training and professional development. Setting new tasks on the part of the manager forces managers to apply all possible skills in their work and learn to discover new opportunities for themselves. Motivation is an important factor in this matter. If an employee knows that he is entitled to an appropriate reward for a specific result, he will try to achieve the goals in different ways.

The budgeting system and its important components

There is also such a thing as a budgeting system. It is a set of streamlined functions aimed at increasing the efficiency of the company. The budgeting system allows you to achieve your goals in a shorter time. It is formed gradually and depends on the characteristics of the company.

Budgeting management includes clearly coordinated activities of different departments of the company, which is designed to improve economic performance and take the company to a new level.

This system provides many advantages, which are represented by the following features:

• Analysis of current activities allows you to formulate the direction of the company not only at the micro level, but also at the macro level. A set of problems is solved, including internal organization the company, as well as its position relative to other market participants;
• Based on a number of indicators for a specific period, it is possible to evaluate the activity of an enterprise at different levels, which helps to identify narrow areas that need improvement;
• Assessment of the work performed by managers of all departments (each indicator in the estimate characterizes the skill level of individual employees and allows them to coordinate their activities);
• Having low performance is an excellent reason to motivate employees. Formed specific tasks for individual items of expenses and income will help to quickly cope with problem areas;
• Improving mutual understanding between employees occupying different positions. Solving common problems together leads to team unity and corresponds to accelerated process implementation of goals;
• Informing all departments (thanks to a well-functioning system, new information flows from higher levels to lower levels at high speed. And this, in turn, contributes to solving one big problem simultaneously at all levels);
• Training of managers (deepening into the internal processes of the company allows you to see the current situation in more detail, which means you can offer a more effective solution to the problem).

What phases does the budget cycle include?

Planning and distribution of income and expenses is a separate stage in the activity of an enterprise, which is usually called budget cycle. This process is repeated at the frequency accepted by the enterprise and is cyclical in nature.

Each new budgeting stage contains several phases. Their presence is due to a number of specific tasks that the company’s management sets for itself.

There are three main phases:

• Planning. At this stage, current indicators are studied, on the basis of which a plan for future implementation is drawn up. This is an important step, since the future activities of the company depend on it. If you miss something, correcting errors can be expensive. It is important to consider possible risks and ways to minimize them. A specific list of directions is developed that the company should follow in the next few months or years;
• Implementation. The stage includes a set of actions that contribute to the advancement of planned tasks. It is important to strictly follow the planned plan and make timely adjustments to actions. This will help reduce costs and achieve goals on time. The phase includes a set of actions by all divisions of the company that can in one way or another affect the result. The entire period of task implementation is divided into several small intervals, in which it is also appropriate to put appropriate plans. This will help to adjust indicators in a timely manner, understand their feasibility or eliminate the problem that has arisen;
• Completion. The results of the company's activities and the two previous stages are summed up. The indicators set as targets and those achieved are compared. If there is a significant difference between them, then the company was operating extremely inefficiently. If the planned standards are observed, goals are set for next period, the implementation of which will contribute to the further prosperity of the company.

The organization's budget and its composition

In a broad concept, an organization's budget includes all income and expenses of the company. However, among these balance sheet items there are many subsections that play a significant role in the formation of the company's budget. Budget sections depend on the size of the company, its activities and experience in the market.

The entire set of existing budgets can be divided into two main types:

• Operating budget;
• Financial budget.

In turn, the operating budget consists of the following sections:

• Income from production;
• Profit from the sale of goods and services:
• Raw material costs;
• Payment of employees' wages;
• Depreciation;
• Payment of taxes;
• General expenses regarding management economic activity and production process.

Financial budgeting has a more complex structure and is based on the forecast of the following components:

• Financial results report (which is taken as the basis for all company activities);
• Cash flow statement (distribution of financial flows within the company is an important factor that forms the basis for planning);
• Balance sheet (its items are an indicator of the effectiveness of the company’s current activities in comparison with the previous period);
• Flow of equity capital (it is important to direct it to those goals that are most important for the company, and those that will contribute to increasing production volumes in the future).

You also need to know the basics of budgeting, which can be presented in three formats:

• Down up. IN in this case All information is collected from the lower levels of the company to management. Information from each division is transmitted and made available for review by the company’s management for possible adjustments and goal setting;
• Top down. Management makes forecasts independently and sends them to the personnel of lower divisions for implementation. Such budgeting methods oblige the management team to fix clear goals with a specified set of tasks for each specific department;
• Combined. The most effective way to achieve productive interaction between all structures within the company. Information comes from management, but employee opinions also play an important role. Any discrepancies are resolved as they arise through joint efforts.

Drawing up an organization's budget: step-by-step instructions

Budgeting technology is not an easy process, especially within a large enterprise. This responsibility lies with the management and financial departments, which apply their experience, take into account the specifics of the company’s activities and budgeting principles.

When creating a budget, you will need to go through several stages, skipping any of which will lead to future errors and the inability to correct them in a timely manner.

Watch a video about the basics of budgeting and budgeting in a company:

We suggest following the following plan for drawing up the organization's budget:

1. Studying the demand for the company's goods/services. The most important step that determines all future activities of the company. The niche occupied in the market is taken into account, geographical location production, category of buyers and seasonal factors;
2. Accounting for business expenses. Here, brand promotion costs, namely company advertising, play a big role. The most effective marketing models are selected, types of buyer behavior are studied, on the basis of which a general idea of ​​the products will be created;
3. A budget for the production process is drawn up. The main focus is on the equipment and its power. Issues about replacing equipment or improving the quality characteristics of existing equipment are being resolved;
4. Administrative expenses are included. Includes expenses for public utilities, equipment of staff workplaces, payment of telecom operators, etc.;
5. A forecast report is drawn up on balance sheet items. Current indicators are taken into account, which can tell a lot about the company’s activities. It is important to pay attention weak points organization to avoid possible problems in the future;
6. Distribution of cash flows between main, financial and investment activities companies. The most important stage that shapes the process of functioning of the company based on the plans set.

It is important at the budgeting stage to compare the indicators of current activities with those obtained in the previous period. This way you can judge the effectiveness of the company.

Financial Director
No. 5, 2002

Budgeting is one of the main tools for company management. The most “advanced” Russian enterprises are already successfully using the budgeting procedure to plan their activities. But, as can be seen from the results of our magazine's round table", practitioners with budgeting experience have questions that require clarification. What can we say about those domestic companies that are just now beginning to implement budget processes. That is why our magazine is beginning to publish a series of articles devoted to this topic. In them, based on personal experience, the authors will talk about their vision of the problem of budgeting. At the same time, the editors will try to give the opportunity to speak out to those who have an opinion different from the author’s. We open the series of articles with material about general principles budgeting.

A company that wants to succeed in the competition must have a strategic development plan. Successful companies create such a plan not on the basis of statistical data and their projection for the future, but based on a vision of what the company should become after a certain time. And only after that they decide what should be done today in order to be at the intended point tomorrow.

In the process of achieving set goals, deviations from the given route are possible, so at each “turn” the enterprise has to calculate various options for its further actions. The tool for such calculations is budgeting.

In numerous textbooks devoted to this topic, one can find various definitions of the concepts “budget” and “budgeting.” Within the framework of this article, the author proposes to use the following terminology.

Budget is a plan for a certain period in quantitative (usually monetary) terms, drawn up with the aim of effectively achieving strategic goals.

Budgeting- This is a continuous procedure for drawing up and executing budgets.

Let's look at the basic principles that you need to pay attention to

a company counting on the successful implementation of budgeting.

Three components of success

Like any procedure, budgeting must be carried out according to pre-approved rules. Therefore, first of all it is necessary to develop and approve uniform rules, on the basis of which the budgeting system will be built: methodology, design of tabular forms, financial structure, etc. It is necessary to ensure that these rules work. And here the “human factor” plays an important role.

Managers often greet budgeting with hostility. Some perceive this simply as additional work that they are trying to impose on them, others fear that budgeting will reveal shortcomings in the work of their departments, and still others may not even understand what is required of them. To force managers to carry out budget procedures, you need to use the notorious “administrative resource”.

Budgeting regulations, the budget itself, the motivation system - all this must be approved by internal company orders, for failure to comply with which employees should be punished. Thus, the second component of budgeting is organizational procedures. The third key to success is automating the entire budgeting process. In large enterprises, the volume of information is enormous, but no matter how significant it is, it must be processed in a timely manner. In modern business, no one needs yesterday's data. It is necessary to analyze today's indicators and forecast for tomorrow, the day after tomorrow, a month in advance, etc. Automation of budgeting is, first of all, automation of planning. In essence, this is the automation of those procedures that are described in the budgeting regulations.

Final budget forms

The entire budgeting procedure should be organized in such a way that last stage management received three main budget forms:

• budget of income and expenses;
• cash flow budget;
• forecast balance.

Some businesses consider it sufficient to draw up only one budget: income and expenses or cash flow. However, for effective planning of the company’s activities, it is advisable to receive all three budget forms at the output. The budget of income and expenses is determined economic efficiency enterprises directly plan financial flows in the cash flow budget, and the forecast balance reflects the economic potential and financial condition of the enterprise. It is unlikely that financial directors need to explain that without at least one of the three budgets, the planning picture will be incomplete.

Personal experience

Igor Govyadkin, Director for Economics and Finance of the Main Information Computing Center of Moscow

We draw up a budget of income and expenses and a cash flow budget. But we are not interested in the forecast balance, since we have no problems with financial stability or independence.

All final forms are filled out based on operating budgets (sales budget, production budget, etc.). The general scheme for the formation of final budgets based on operating budgets can be found in any textbook on budgeting or management accounting, so we will not present it within the framework of this article. However, in one of the following articles we will analyze in detail the process of forming all budgets using the example of a Russian holding company.

It should be noted that after drawing up a budget of income and expenses, a cash flow budget and a forecast balance, the planning work does not end. Firstly, the data obtained is the source for management analysis, for example, for calculating ratios. And secondly, the stage of correction, approval, decision begins problematic issues. The entire budgeting process enters the second round, and as a result, one part of the quantitative information moves into the “mandatory” category, and the other into the category of immediate updated plans.

Efficiency is in following the principles

The principles of effective budgeting are based on common sense and quite simple. For data comparison and analysis different periods The budgeting process must be constant and continuous. The periods themselves must be the same and approved in advance: week, decade, month, quarter, year. Let's look at the basic rules that any budgeting company must follow.

The principle of "sliding"

Continuity of budgeting is expressed in the so-called “sliding”. There is a strategic planning period, such as five years. For this period, a so-called development budget is drawn up, which should not be confused with a business plan. The business plan should contain not only quantitative information, but also the business idea, marketing research, production organization plan, etc. In principle, the financial part of the business plan is the development budget.

The five-year strategic planning period includes another period of four quarters. Moreover, such a planning period is always maintained: after the first quarter, another one is added to the fourth and a budget for four quarters is drawn up again. This is the principle of "sliding". What is it for?

Firstly, using a “rolling” budget, an enterprise can regularly take into account external changes(for example, inflation, demand for products, market situation), changes in your goals, and also adjust plans depending on the results already achieved. As a result, forecasts of income and expenses become more accurate than with static budgeting. With regular planning, local employees become accustomed to the requirements and align their day-to-day activities with the company's strategic goals.

Secondly, with static budgeting, the planning horizon is significantly reduced by the end of the year, which does not happen with a “rolling” budget. For example, a company that approves a budget for the year in advance once a year in November, in October has plans only for the next two months. And when the budget for January appears, it may turn out that it is already too late to order some resources, the application for which should have been placed three months before delivery, that is, in October.

Personal experience

Igor Govyadkin

We use a static budget, since our main customer - the Moscow Government - works within the framework of annual budgets. But the preliminary budget for next year We are drawing up already in September.

Approved - execute!

Approved budgets must be executed - this is one of the basic rules. Otherwise, the whole idea of ​​planning and achieving your goals is null and void. For non-compliance it is necessary to punish, for execution - to motivate (the issue of motivation within the framework of the budgeting process will be discussed in detail in one of the following articles of this series).

Personal experience

Alexander Lopatin, deputy general director Svyazinvest company

When a step to the left or a step to the right of the budget is considered a crime - this is extreme. There is no need to be afraid to revise the budget - this is a normal process. You just need to clearly define the reasons for the change, the procedure for making changes, etc. If everything is clear to everyone, there are regulations, then problems and questions should not arise.

Teijo Pankko, Chief Financial Officer of Alfa-Bank

The budget is practically a law. Since we approved it, it means that this is how we want to work. AND final result must be achieved. If something unplanned happens, we must understand why it happened, why the set goals were not achieved, and make appropriate operational decisions.

At the same time, as mentioned above, budgeting is primarily based on common sense. Any company may encounter force majeure circumstances, so the regulations must provide for a procedure for both planned and emergency budget adjustments. Ideally, the budget should include the probability of any event occurring. For this you can use, for example, a flexible budget.

A flexible budget is prepared on an “if-then” basis. That is, a flexible budget is a series of “hard” budgets based on various forecasts. In the future, no matter what events occur (military conflicts, global economic crisis, new OPEC decisions), the budget will not have to be reviewed or adjusted. It will be necessary to strictly implement the budget, which is based on the fulfilled forecast.

The Royal Dutch/Shell Group successfully used flexible budgeting in the 1980s. Then many oil companies believed that by 1990 oil prices would rise to $60-80 per barrel, and based on this they planned their development strategy. Royal Dutch/Shell Group has developed three possible scenarios, one of them is taking into account low prices for oil. Real price in 1990 was $25 per barrel. The use of "flexible" planning allowed the Royal Dutch/Shell Group to develop better than other companies in the current conditions. It is advisable to draw up a flexible budget in the case when there are parameters that do not depend on the enterprise, but have a significant impact on the results of its activities. Such parameters can be sales price, volume of demand, price of resources (for example, when the main resource is oil) and others external factors affecting the work of the company.

From indicative planning to directive planning

How often should you review your budget? The answer to this question should be contained in the regulations. Budget revision is the same regulated procedure as the preparation or execution of a budget. To do this, all plans must be divided into two categories: preliminary (indicative) and mandatory (directive).

The process of moving a plan from the “preliminary” category to the “mandatory” category must include certain stages: adjustment, coordination and approval. The duration of all stages is specified in the budgeting regulations. All this is necessary to ensure that the budget is not just a plan, but a plan that can be implemented. You can only get managers to fulfill an unrealistic budget once, but if you demand this constantly, the manager will simply leave the company.

Personal experience

Igor Govyadkin

We have adopted a year and a quarter as an indicative planning period, but the monthly budget falls into the category of directive plans.

Elena Korneeva, financial director of the company "I.S.P.A.-Engineering"

We do not draw up directive plans, only indicative ones. Even within the weekly budget. The situation is changing very quickly, and therefore we try to quickly respond to all changes. The budget cannot be monumental; it must reflect the real life of the enterprise.

Toward common standards

All budget forms (tables) must be the same for all accounting centers. This is especially true for holdings that include various enterprises. If each plant uses its own forms, then the financial service of the management company will spend the bulk of its time consolidating data rather than planning and analyzing results.

The procedure for filling out budgets at different enterprises of the holding, as well as at the levels of financial responsibility centers within enterprises, should be the same standard and based on a unified methodology. Accordingly, the deadlines for submitting budgets by divisions of the holding to the management company should be uniform.

The principle of detailing expenses

In order to save resources and control the use of funds, all significant expenses should be detailed. The author recommends detailing all expenses that account for more than 1% of total expenses, although company size should also be taken into account. The point of detailing is to prevent managers of costly departments from profiting at the expense of the company.

The directive part of the budget should be much more detailed than the indicative part and have the highest possible level of detail.

The accounting period can also be detailed. For example, the income and expense budget can be detailed by month, and the cash flow budget by week or even banking day, since control over financial flows requires greater care and efficiency.

The principle of "financial structure"

Before implementing budgeting, an enterprise needs to create a financial structure that can be built on principles other than organizational structure. Some divisions can be combined into a single financial accounting center. Conversely, within one division, different accounting centers can be distinguished (for example, by type of product or area of ​​activity).

Depending on the category of the accounting center (whether it is a profit center or a source of costs), various systems of criteria should be developed to evaluate the performance of these units.

Having developed a financial structure, the enterprise will identify the number of levels of collection of budget information and, depending on this, will be able to create a schedule for drawing up budgets for each accounting center.

"Transparency" of information

To eliminate the possibility of distortion of information and strengthen control over budget execution, a specialist analyzing data from final budget forms needs access to the budgets of each accounting center, as well as to the operating budgets within the accounting centers themselves, down to the lowest level. In addition, he must have information about the stage of budget formation at all lower levels. And if some department submitted a budget later than necessary, then the financier responsible for budgeting must promptly receive information about the reasons why this happened. Therefore, constant monitoring of the budgeting process at all levels is necessary. In automated budgeting programs, such monitoring is easy to carry out; it is much more difficult to do this if budgets are formed in ordinary spreadsheets.

Towards effective budgeting

All procedures and principles described above must be reflected in the “Budgeting Regulations” that are uniform for the entire company. This document should define the procedure for approving budgets and their consolidation, forms of documents, workflow schemes, as well as the timing of consideration and decision-making at all levels of collecting budget information.

It must be remembered that budgeting is a large systemic task. But, despite the difficulties that arise in the course of solving it, we must try to adhere to the principles described above.

The main thing is to understand why budgeting is needed.

Interview with the financial director of the Econika corporation Vladimir Borukaev

How long has your company been using budgeting?

When we started doing business, we, like many other companies, didn’t even think about introducing budgeting. Then, in 1993-1994, we began to carry out planning in the classical form in which it is meant. Budgeting was introduced in stages. Some areas were implemented intensively, others gradually.

What should financial directors who are planning to introduce budgeting in their enterprises first pay attention to, where to start?

In my opinion, when implementing budgeting, the main thing is to understand the essence of the process. If a person does not understand the process, it will just be numbers. Management must monitor performance for each budget item. If they have changed, you need to understand why this happened.

Does your enterprise have a system of motivation and managerial responsibility for budget execution? What kind of fines, bonuses?

And fines and bonuses, of course, exist. But there is no direct, clearly defined dependence on budget execution. With us, each manager is responsible for his department and the final result he receives. You cannot reward or punish for the fulfillment or non-fulfillment of one budget item, especially in the short term, without understanding the process as a whole. It is necessary to understand the reasons, which do not always depend on the person responsible for the budget item.

The sales budget is often called one of the most difficult budgets to both plan and execute. How is it compiled in your company?

The sales budget is formed based on the goals set for each department. For each source of income, a marketing plan is drawn up, on the basis of which sales volume is predicted.

On what basis are these plans formed? Are they brought down from the top by management or initiated by the units themselves?

The management company determines the strategic goals and directions of development of the holding as a whole, and the subsidiaries, in accordance with them, independently form their own product and marketing strategies and plans, which are then approved by the Board of Directors.

During the “round table” on budgeting, which was held by our magazine, among others, questions were raised: how should a financier control technical services, how to check the reality of the numbers in their budget requests? What do you think about it?

When approving write-off standards, we first look at the existing statistics of the costs that we want to standardize. Moreover, several people usually participate in the development of standards, for example, heads of the transport service and logistics department. In addition, an auditor or an independent consultant is also involved in this process and provides an opinion. The standard is approved by a special commission.

At what point does an enterprise need to introduce budgeting? It’s no secret that many companies still manage without it?

If this is not a one-time transaction, then planning is already required, at least for large indicators. If the business has a long history, then everything needs to be calculated more accurately and seriously. Although some heads of organizations believe that “the money goes and goes, why do we need planning and budgeting.” Typically, this approach ends up having a negative impact on the business.

Happened in last years structural, property and legal changes in domestic industry inevitably create the need for strategically oriented development programs industrial enterprises supplement with budgeting. Representing a specific approach to organizing the management of the economic and financial activities of an enterprise, it ensures the full participation of all divisions of the enterprise in the processes of developing comprehensive plans based on timely and reliable information about the state of development and implementation of budget planning and reporting systems.

The term "budgeting" has many meanings. different interpretations. Thus, Starovoytov M.K., Chairman of the Board of Directors of Volzhsky Orgsintez OJSC, based on actual experience in managing budget planning, interprets budgeting as “... a special management tool, the essence of which can be defined as an integrated system of budgeting, ongoing monitoring of the implementation of adopted budgets, accounting deviations of actual indicators from budget ones and analysis of the reasons for significant deviations.” In his work S.V. Ildemenov and his team of authors believe that the concepts of “plan” and “budget” are very close in meaning. IN English language The word “budget” is used, from which the whole procedure is called “budgeting”.

This range of opinions regarding the essence of budgeting is most often dictated either by a lack of knowledge of the general methodology for creating this process, its tasks, and the results that can be obtained in the process of implementing these technologies, or by an attempt to introduce foreign techniques without adapting them to Russian conditions management.

Among the definitions found, the following formulation of the concept of “budgeting” is the most accurate and complete, this is due to the fact that it indicates its true purpose in the enterprise: “Budgeting is the process of drawing up and adopting budgets, on the one hand, and on the other, a management technology , designed to develop and improve the financial feasibility of adopted management decisions» .

In our country, budgeting is often understood as so-called treasury budgeting, that is, regulations for managing funds used in the operational (main) activities of a commercial organization. In world practice, budgeting is an element of management focused on managing a commercial organization (in monetary terms), which is a methodology for planning, accounting and control of funds and financial results. Thus, in relation to it, the treasury function is secondary.

In the very general view The purpose of budgeting in a company is that it is the basis:

planning and making management decisions in the company;

assessment of all aspects of the company’s financial solvency;

strengthening financial discipline and subordinating the interests of individual structural divisions to the interests of the company as a whole and the owners of its capital.

Moreover, each company may have its own budgeting purpose, depending on the object financial planning, and from the system of financial and non-financial goals. Therefore, when talking about the purpose of budgeting, it is necessary to remember that in each company, as a management technology, it can pursue its own goals and use its own means, its own tools.

Budgeting is a complex system including:

• - a set of interrelated planning documents that reflect the planned activities of both individual financial responsibility centers (FRCs) and the entire enterprise with a reasonable level of detail of indicators;
• - management influences on the center financial statements(CFD), focused on minimizing deviations from the budget, taking into account changes in the external environment;
• - reporting of the Central Federal District, which allows you to quickly, with a certain time interval, analyze and control the implementation of budgets by individual Central Federal Districts and the achievement of planned financial results by the enterprise as a whole.

The budgeting system is a set of elements such as the structure of budgets, the procedure for the formation, coordination and approval of budgets and control over their actual implementation, the regulatory framework (norms, standards, limits), standard procedures and mechanisms for making management decisions. IN general case We can distinguish five stages of establishing a budgeting system in an organization; they are presented in Figure 1.1.

The goal of the first stage (formation of a financial structure) is to develop a model of the structure that allows one to establish responsibility for the execution of budgets and control the sources of income and expenses.

At the second stage (creating a budget structure), the general scheme for forming 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.

Figure 1.1 - Stages of setting up a budgeting system

The fourth stage is aimed at developing planning regulations that define procedures for planning, monitoring and analyzing the reasons for non-fulfillment of budgets, as well as ongoing budget adjustments.

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

The goals of budgeting are:

• - implementation of periodic planning;
• - ensuring coordination, cooperation, communication;
• - the requirement for managers to quantitatively justify their plans;
• - ensuring cost awareness;
• - creation of a system for evaluating and monitoring performance;
• - motivating employees through goal orientation;
• - compliance with the requirements of laws and contracts.

There are three main approaches to the budgeting process:

• - "top down";
• - "down up";
• - "from below - up from top to bottom".

The top-down approach means that senior management carries out the budgeting process with minimal involvement of lower-level division and department managers. This approach makes it possible to fully take into account the company’s strategic goals, reduce time costs and avoid problems associated with the coordination and aggregation of individual budgets. However, the disadvantage of this approach is the weak motivation of lower and middle managers to achieve goals.

The “bottom-up” approach is used in large enterprises, where department heads draw up budgets for sections and departments, which are then summarized into the budgets of the workshop, production and plant, respectively. In this case, middle and senior managers will have to agree and coordinate various budget indicators. One of the disadvantages of this approach is that planned indicators for expenses are overestimated, and for income they are underestimated in order to receive an undeserved reward when fulfilled.

The bottom-up top-down approach is the most balanced and avoids negative consequences two of his predecessors. In this approach, top management gives general directives regarding the company's goals, and lower and middle managers prepare a budget aimed at achieving the company's goals.

The use of budgeting is effective in such areas of management as:

• - in the field of financial management, this method is the only means by which it is possible to form in advance a fairly clear idea of ​​the structure of the enterprise’s business, regulate the amount of expenses within the limits corresponding to the overall cash flow, and determine when and for what amount financing should be provided;
• - in the field of management commercial activities this method forces managers to systematically engage in marketing (study their products and markets) to develop more accurate forecasts, which contributes to better knowledge of the situation at the enterprise; determine the most appropriate and effective commercial activities within the limits provided by the available resource capabilities for their implementation;
• - in the field of organizing general management, this method clearly defines the meaning and place of each function (commercial, production, financial, administrative, etc.) carried out in the enterprise, and allows for proper coordination of the activities of all enterprise management services, forces these services to act together to achieve the results approved in the budget;
• - in the field of cost management, this method contributes to a more economical use of means of production, material and financial resources and ensures control of expenses depending on the specific purpose for which they are incurred, in accordance with permissions received from management;
• - in area overall strategy enterprise development, this method is a means of quantitative assessment of activity, independent of the emotional perception of managers directly responsible for achieving set goals, and signals the enterprise management about unfavorable changes in the situation by reporting deviations of actual results from forecast indicators.

The budget, as a management tool, implements all its functions, namely:

• - planning operations to ensure the achievement of the organization’s goals;
• - coordination of various types of activities and individual departments, coordination of the interests of individual employees and groups in the organization as a whole;
• - encouraging managers of all ranks to achieve the goals of their responsibility centers;
• - control of current activities, ensuring planned discipline;
• - grade;
• - education .

Let's take a closer look at each of the listed functions.

Planning. Basic planning decisions are usually developed in the process of preparing programs, and the process of developing a budget itself is essentially a refinement of these plans. Development of budgets is essentially the most detailed type of planning, clarifying the main operations for individual divisions or functions of the company for the coming period.

Coordination and communication. The budget development process coordinates individual activities so that all parts of the organization work in harmony to realize the goals of the organization as a whole. It is very important that production plans are coordinated with the marketing department's plan, i.e. It is necessary to produce quantities of products in accordance with the planned sales volume and the desired level of ending finished goods inventory. Management's plans will not be implemented until all those involved understand the content of these plans. The approved budget is the most important tool for linking the quantitative information in these plans and the existing constraints.

Stimulation. The budgeting process can also be a powerful tool for encouraging managers to achieve the goals of their responsibility centers and, therefore, the goals of the organization as a whole. The stimulating role of the budget is even more pronounced if managers take an active part in developing the budget of their department.

Control. A budget is a statement of desired results at the time the budget is created. A carefully prepared budget is the best standard against which actual results are compared, since it includes an assessment of the effect of all the variables that were forecast at the time the budget was developed. Analysis of deviations between actually achieved results and planned budget data can:

• - help identify problem areas that require priority attention;
• - identify new opportunities not provided for in the budget development process;
• - show that the original budget was unrealistic to some extent

Grade. Deviations from the budget, determined monthly, serve for control purposes throughout the year. Comparison of actual and budget data for the year is often a major factor in the evaluation of each responsibility center and its manager at the end of the year.

Education. The budget also serves good remedy manager training. Budgeting helps to study in detail the activities of their departments and the relationships of some centers of responsibility with other centers throughout the organization as a whole. This is especially important for individuals newly appointed to the position of head of a responsibility center.

It is advisable to introduce the budget planning mechanism into the practice of Russian enterprises to ensure savings in monetary resources, greater efficiency in managing the latter, reduction of unproductive expenses and losses, as well as to increase the reliability of planned indicators (for tax planning purposes). Thus, the advantages of introducing budget planning principles are:

• - monthly planning of the budgets of structural divisions will provide more accurate indicators of the size and structure of costs, and, accordingly, a more accurate planned value of profit, which is important for tax planning (including payments to extra-budgetary funds);
• - as part of the approval of monthly budgets, structural units will be given greater independence in spending savings from the wage fund budget, which will increase the material interest of employees in the successful implementation of planned targets;
• - minimizing the number of control parameters of budgets will reduce unproductive working hours of employees of the economic services of the enterprise;
• - implementation of a strict economy regime of the enterprise’s financial resources, which is especially important for overcoming the financial crisis.