Analysis Of Four Major Problems In Enterprise Budget Management

< p > < strong > 1, < a href= > http://www.91se91.com/news/index_c.asp > budget management < /a > positioning of the main body: /strong > /p >
< p > (1) who participates in budgeting? There are two functions of enterprise budget management, that is, management decision and management control. Different functions have different requirements for the design of budget management system. For example, in the process of making sales budget management, according to the information asymmetry between professional departments caused by division of labor, the sales department controls the future sales situation of the enterprise. If the budget is only for the purpose of giving full play to the management decision making function (such as sales), the sales Department will give out the information it grasped without authorization and share it with all departments. However, if one of the objectives of the budget management is to play the role of management control (such as performance evaluation standard), the sales department may deliberately underestimate future sales revenue, which is conducive to its performance evaluation. However, underestimation will result in a corresponding reduction in production planning, and the production of enterprises will not be able to achieve the highest efficiency. In order to allocate funds on the basis of budget management, all departments have greater freedom in the use of funds and can control more funds, which may exaggerate the capital demand of the Department, thus causing the waste of funds, which is obviously contrary to the intention of communication and coordination of budget management. < /p >
< p > therefore, in order to solve the contradiction between the above functions and departments, in the practice of budgetary management, on the one hand, all departments should be involved in the formulation of budgetary management, so as to promote the maximum flow of information, make the budgeting more detailed and increase the scientificity and operability of budget management. On the other hand, in the past, many enterprises only completed the budget and carried out the implementation by the finance department, reduced the authority of budget management, and caused the soft budget constraint of enterprises. To solve this problem, it was necessary to let the top leaders of the enterprise participate in the budget management and have the final decision-making power. Only in this way can the feasible budget management plan be worked out from the overall situation of the whole enterprise. < /p >
< p > (two) set up < a href= "http://www.91se91.com/news/index_c.asp" > Budget Committee < /a >. The budget management committee shall be composed of managers of important functional departments and headed by senior business leaders. The budget management committee coordinates the information sharing among departments so that departments can reach agreement on basic assumptions. Basically, only after the approval of the budget management committee, no budget or forecast data can be accepted. The function of this budget management organization is not only the budgeting, but also the follow-up, such as the implementation, adjustment and supervision of budget management. If we solve the contradictions in all departments (similar to the internal arbitration committee) in the process of implementing budget management, we can find out the deviation between enterprise activities and budget management at any time and analyze the reasons. If some basic assumptions have changed significantly, we should adjust the budgetary management as soon as possible. < /p >
< p > the composition of the budget management committee should adhere to the principles of authority, overall representation and efficiency. The authority principle refers to that the budget management must be authoritative and can be carried out in practical work, and its members must have absolute control over the activities of their departments. The principle of comprehensive representation refers to the ability to fully represent the interests of all departments and all levels and make them reasonably reflected in budgetary management. The principle of efficiency is to ensure the efficiency of the Committee. This determines that the number of members should not be excessive, and we must be capable, efficient and unified. < /p >
< p > < strong > two, budget management < a href= > http://www.91se91.com/news/index_c.asp > < < /a > reconstruction > /strong > /p >
< p > during the planned economy period, the total amount of budget management indicators determined by the higher authorities is usually divided into various functional departments. This "top-down" budget management process can directly reflect corporate objectives in budgetary management, which embodies the mandatory and authoritative budget management. However, because of this limited budget management process, the budget management is easy to be divorced from reality, making it difficult for budget management to play its role in planning, coordinating and controlling. < /p >
< p > in the process of criticizing the "top-down" process, we can not simply choose the bottom-up process. "Bottom-up" is to provide relevant information from various functional departments. The budget management committee (or higher level departments) should be integrated to determine the total amount of budget management, and then decompose it into various functional departments. This way, though to a certain extent, overcomes the serious problem of breaking away from reality, it is still far from enough in information exchange. < /p >
< p > budget management should be the process of repeated game between participants. In this process, information flow is multi-directional and repeated until the final agreement is reached. The budget management process is designed as follows: (1) first, the budget management committee puts forward the key indicators, such as sales volume, sales price, production cost, target profit and so on, but does not need to determine the specific value. (2) these indicators are fully discussed by all functional departments until the formation of a consensus opinion. The committee needs to guide and supervise the discussion process; (3) the budget management committee accordingly determines the total budget quota and initially decomposes it into all functional departments; (4) each functional department formulatively calculates the budget of the department according to the budgetary indicators separately, and makes the audit and summary by the budget management committee; (5) the budget management committee sets up a comprehensive budget and distributes various functional departments. < /p >
< p > < strong > three, and the choice of basis for budgeting management is < /strong > /p >
< p > current budget management is generally compiled on an annual basis, which is easy to understand and used for performance evaluation, but the calendar year system does not have sufficient theoretical basis, because the business activities of enterprises are not based on the annual cycle, and there is no obvious regularity between enterprise activities or achievements in the year and year. According to the long-term development and strategic objectives of enterprises, it is particularly necessary for enterprises to prepare long-term strategic budgets, because long-term budget is the inevitable requirement of modern scientific management. Through long-term budgeting, enterprises predict the long-term economic environment and the possible impact on enterprises and the countermeasures that enterprises should take, and divide the long-term plan into specific indicators, which not only provide guidance for business activities in concept, but also prevent enterprises' behavior bias from specific indicators, so as to prevent the short-sighted behavior of enterprises from affecting long-term goals. < /p >
< p > since the calendar system is not suitable for long-term budget management, this paper argues that the cycle system should be replaced by the enterprise cycle, including the enterprise life cycle and product life cycle, as the basis for budgeting management. Because enterprise cycle is a regular description of the enterprise environment and enterprise behavior, it is a general classification of the uncertainty faced by the future enterprises. The cycle system will enable enterprises to predict the future cycle of enterprises in the future, first of all, to define the current cycle of enterprises, and predict the future situation according to the cyclical law of the enterprise environment and enterprise activities, so as to make the budget more realistic. At the same time, an important way to achieve strategic management is to implement the cycle strategy, that is, to establish the development strategy of enterprises in all stages and phases at the same time based on the enterprise cycle, which requires enterprises to adopt the cycle system to compile budgets. < /p >
< p > cycle system is not to deny the calendar year system, but to improve the calendar system, making it more practical and feasible on the basis of giving full play to its original functions. In view of the role played by calendar system in planning and statistics, periodic system and calendar year system should complement each other and represent each other. < /p >
< p > < strong > four, thinking of budget management implementation < /strong > < /p >
< p > (1) avoid target replacement. Budgetary objectives are subordinate to and subordinated to business objectives. However, in corporate activities, budgetary provisions are always strictly established, and budget objectives are always focused on. The first reason is that the budget management control is not properly grasps. Two, the budget management indicators do not well reflect the requirements of the enterprise goals, or the change of the economic environment causes the deviation between the budget management objectives and the enterprise goals. In order to prevent target replacement in budget management control, we should make budget management better reflect the requirements of the plan, and on the other hand, we should properly grasp the intensity of budgetary management control so as to make the budget management flexible. < /p >
< p > (two) avoid excessive complexity. Some enterprises believe that the budget, as a means of management and control, should make specific provisions to deal with every detail of the future operation of enterprises. In practice, this will lead to the lack of the leeway of functional departments and inevitably affect the operation efficiency of enterprises, so the budget management is not as thin as possible. The extent to which the budget should be refined must be linked to the degree of discretion of the functional departments. Careful and excessive budgets are equivalent to allowing the authority to exist in name only. < /p >
< p > (three) avoid being conservative. Budget management is usually based on the cardinal number method, that is, the historical situation as the basis for judging the present and future. If the functional departments use the daily expenditure of the previous year as the budgeting standard, the functional departments may deliberately expand their daily expenses so as to obtain a larger budget expenditure standard in the following years. Therefore, effective budget management and control measures must be taken to avoid this phenomenon. For example, we can reduce human factors and improve accuracy and scientificity by means of detailed reporting contents and sound reporting system. < /p >
< p > (four) avoid immutable. After the budget management is worked out, the budget executors should manage the budget, promote the implementation of the budget, and check, revise and adjust the budget according to the actual situation at that time. Although we foresee what may happen in the budget and formulate corresponding contingency measures, the budget is impossible on the one hand, and on the other hand, the situation is changing. There are always some problems that can not be foreseen. Therefore, budgetary management can not be immutable. We must regularly check the budget. If the situation has changed significantly, we should adjust the budget or reformulate the budget so as to achieve the desired goal. < /p >