Budget Planning

Budgeting is the process of planning the future activities of an enterprise, the results of which are documented by a system of budgets.

Budgets are usually created as part of operational planning. Based on the strategic goals of the company, budgets solve the problem of the distribution of economic resources at the disposal of the organization. The development of budgets gives quantitative certainty to the chosen prospects for the existence of the company.Budget Planning_ How to Arrange Finances in Enterprises_The main objectives of budgeting include the following:

  • providing ongoing planning;
  • providing coordination, cooperation and communication units of the enterprise;
  • justification of the costs of the enterprise;
  • creating a base for assessing and controlling enterprise plans;
  • compliance with laws and contracts.

The benefits of high-quality budgeting and control over their execution are too expensive for their implementation and development. Of course, a lot depends on the specifics of the enterprise, but even small firms are encouraged to use budgeting (for example, in an abbreviated version).

The introduction of budgeting in an enterprise faces two groups of problems: methodological and organizational problems. The experience of the author proves that, as a rule, the most difficult in budgeting is the stage of its implementation on the enterprise. The enterprises inherited vast experience in drafting documents that were unnecessary for an enterprise in a market economy.

Therefore, the decision of the top management to introduce budgeting in the new real scale of values is of fundamental importance. And from this point on, the serious work essentially begins, the main stages of which are as follows:

  • the study of internal and external documentation of the enterprise, its structure and interaction units, mechanisms of management accounting, etc.;
  • finding the least painful ways to involve the management team of an enterprise in the budgeting process;
  • development of a budgeting implementation plan (all further actions will be determined by the implementation plan);
  • revising old or developing new internal standards;
  • creation of an information base for budgeting, providing for the development of new reports on departments, close to the specifics of the enterprise;
  • creation of new or reorganization of old units for the implementation of the budgeting process;
  • development or acquisition of software and its installation on the internal network of the enterprise;
  • training.

The time-consuming process of implementing a budgeting system can last for months and even years. In addition to time-consuming, it requires highly professional specialists in the field of budgeting and computer equipment.