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Management Accounting - Business Budget Management and Countermeasures

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									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.

								
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