VIEWS: 10 PAGES: 4 POSTED ON: 9/13/2010
Management Accounting - Business Budget Management and Countermeasures Comprehensive budget management is to strengthen centralized management, and a subsidiary group of the branch an important means of internal control and was more and more enterprises to carry out group management as an effective starting point. It needs to fully research the market and the premise of scientific prediction, to sell the budget as a starting point, and then to such as production, costs and capital expenditure and other economic activities in all aspects of internal management control is a major way, and enterprise to achieve optimal allocation of internal resources, and improving economic efficiency of advanced and scientific management methods. Enterprises through the budget to monitor progress in the implementation of strategic objectives, will help companies control costs, and forecast the cash flow to effectively promote enterprise management level. However, in practical work, budget administration, particularly the promotion of overall budget management is difficult. Enterprises from China's overall budget management of the actual situation, managers of the budget management and there is no clear understanding of the process leading to specific implementation problems emerged: first, there is distortion of the overall budget management. Practical work, some people, especially managers that budget is a tool to compete for resources; some people promoted as a means of budget management, preparation of the budget is not realistic to please the higher authorities; some people think that because of budget management has failed to budget for useless only decoration only, not well support the business strategy; Some people think that overall the budget is the financial sector, things do not ride with their community, and so on. These ideas are a distortion of the overall budget management. Second, because of information asymmetry lead to "budget slack" and "the effectiveness of budget targets poor." In budget management, information asymmetry is lower and the budget manager has information related to a higher level managers do not possess, both asymmetry reflected in the budget preparation process, but also in the process of budget implementation. Lower participation in the preparation of the budget have the opportunity to make higher-level understanding of the real situation of the sector, access to the various departments - some private information, but this generally is not straightforward. Lower level managers with their information advantage, natural advantage of opportunities to participate in the budget, the establishment of a more relaxed budget. This is the budget management of information asymmetry arising from moral hazard and adverse selection problems. Third, budgeting starting point does not meet the basic economic laws. Total Budget for the preparation of the budget is usually the starting point of sale, according to the actual situation of enterprises and market forecasts, and accordingly determine the associated costs and then come next year's expected profit. Some businesses, as senior managers or shareholders of the plan does not meet the actual profit targets, and then by the next level of managers to develop marketing budget, production budget. This results in no real basis for the budget, contrary to the basic economic rules. Divorced from reality, to develop much higher than the capacity of the giant enterprise standard, the budget is not only not get the support of corporate sales department, and often unrealistic as the basis, foundation, hard to effective implementation, budget targets a lack of flexibility, lack of ability to respond to market . Fourth, budget, business executives emphasized the particularity of Er Shi inadequate budgetary control. In the budget execution process for a variety of different purposes, the budget will emphasize the implementation of those special nature of their business. For example due to environmental changes, market fluctuations and criticize "the budget is too rigid", "plan not keep up with changes", so the budget can not insist on the implementation of programs and indicators of business operations and financial revenue and expenditure are very random, resulting in budget management anticlimactic. Therefore, the implementation of the budget process, to implement the "rigidity principle", taking into account environmental changes, structural changes in business processes impact on the budget implementation. And in accordance with strict procedures for budget adjustment to the management of exceptions in order to ensure the accuracy of the budget and budgetary control is effective. Fifth, the budget performance evaluation of rewards and punishment system is unreasonable, not rigorous. Because a significant number of enterprises lack a corresponding budget evaluation system, resulting in budget preparation and implementation of business separate from, heavy preparation, light implementation. Budget can not be the business of "hard constraints", so that the budget should lose its authority and seriousness to dampen the enthusiasm of the staff so that they do not agree with budget management, budget management eventually led to failure. As the prevalence of the above problems, when a certain development stage company, management level, the distribution of power, cost control, departments and staff performance appraisal and other issues emerging, preventing further development of enterprises. At this point, companies will need to adjust the existing management system to break through bottlenecks in the development of enterprises so that enterprises in the management of a higher level of development. How to improve the practical effect of a comprehensive budget management is a complex topic. However, from the actual situation of Chinese enterprises, the following points from the overall budget management to improve the results. First, change the concept, the Finance Department's overall budget into the overall budget for all staff. There have been a mistake to understand that the comprehensive budget management is a matter of financial sector, other departments only to provide some data only. In fact, a comprehensive budget management is to protect an important means of implementing corporate strategy, resources directly related to the distribution within the enterprise. In the preparation process, the financial sector is to provide services to support the real source of data, from top to bottom, is the strategic goal of the decomposition; from bottom to top, it is the work of every employee enterprise resource requirements summary . So from this perspective, a comprehensive budget that is full budget, only the full participation of enterprises, carry out a comprehensive budget only solid foundation. Second, set up a special budget management committee, the budget from the organizational framework to ensure democratic and reasonable. To change the "budget is only a matter of financial sector", enterprises should set up a special budget management committee for the annual budget preparation, adjustment. Management Committee should be in-depth analysis of the actual production to determine the method of budgeting. Management Committee shall be composed of various departments, in accordance with the project team manner. Third, relying on corporate strategy and operational plan, to budget more accurately. There, many enterprises are not allowed the budget situation, enterprises should pay attention to the budget strategy and operational plans in the interface between. Before the start of the annual budget, business executives should make the company's strategy and multi-year development strategy, and strategic goals must be clear. Some of the strategic business direction only, not specific to the target, it is difficult to be budgeting guidance. According to the decomposition of the strategic objectives, business sector, operational plans may be prepared, and according to the detailed preparation of department budget. Department budget and strategic goals of access through several rounds of changes and adjustments, to avoid the budget by the department compilers racking our brains, or some department is under a budget, the budget is set. Fourth, even if the analytical assessment of the implementation of the budget: to avoid "code thing and doing another." Budget implementation process and the implementation process and there is always a big departure from even out, companies need to analyze and assess its causes. Just the implementation of budget management companies, in particular, need attention. Lack of operational experience, may not operate in a number of deviation, but budget problems, we must first rule out the possibility of deviation from the process of production and operation, the method should be used factor analysis, trace the new moon source, and tap into the minimum difference layer. Implementation of the budget department of the assessment results must be tied to the performance. In many companies, with budget-related work is not fully integrated into Di evaluation system, in particular the preparation of the budget reasonable and Xing, caused by various sectors in the establishment of artificial control of the Guoduo, making budget "series thing and doing another". In view of this situation, enterprises need a comprehensive budget management on various important aspects, set the corresponding markers. Such as "revenue was completed, cost savings, the budget Bianzhi error, such as budget adjustments Cishuo systematic and comprehensive assessment, and performance appraisal system as the company an important part, into the annual performance appraisal. In order to improve budget management across the enterprise's seriousness . Fifth, the positive and prudent to adjust the budget. Most people think that companies should not do as much as possible budget adjustments, adjust the time period up to one year. the actual implementation of the budget on just the management of enterprises, because all conditions are not ripe, it starts with a press budget implementation, no adjustment is unrealistic. should be treated very carefully the budget. especially those affecting the strategic objectives of the adjustment, the best guarantee adjusted once a year. but does not affect the strategic objectives for the adjustment, the best in the first quarter adjustment time. Also in the Construction of a comprehensive budget management system, enterprises should fully understand their own characteristics, to establish a new budget management concepts: the establishment of "enterprise strategy- based", thus allowing the budget management as the basis for long- term development strategy; establishing " market-oriented "concept, the budget targets can stand the test of the market; establish" future-oriented and activity-based decomposition for the budget "concept, the budget target objective and fair, and acceptable; establish the" value chain analysis will be based on budget ", thus allowing the coordination of budget management as among the various departments within the enterprise economic activity and effective means of conflict of interest; establish" appropriate point on the assumption that the budget "concept, so that budget targets and reasonable based on the assumption that some unknown factors based on the ease of enterprise budgeting and budget management to carry out; establish "evaluation and reward and punishment is a lifeline" concept, to ensure that budget management implementation in place; establish a people-centered concept, mobilize the enthusiasm, and comprehensively improve budget efficiency and effectiveness. source accounting Wang Jiao of China.
Pages to are hidden for
"Management Accounting - Business Budget Management and Countermeasures"Please download to view full document