Clarify the organizational structure
The organizational structure of budget management is the basis and guarantee of comprehensive budget management, and the setting of organizational structure includes the setting of each budget agency, the functions of each agency, the division of responsible units, and the responsibilities of relevant departments of enterprises.
Second, establish procedures and processes
On the basis of a full understanding of the management, business and financial situation of the enterprise, design the various processes of the comprehensive budget management solution. the main processes of budget management include clarifying the responsibilities of the responsibility center, defining budget objectives, budget preparation, summary, review and approval, budget execution and management, performance reporting and difference analysis, and budget indicator evaluation.
Third, implement comprehensive budget management
The prepare the budget of the enterprise according to the principles, methods, processes and procedures of budget management, implement budget management and assess the responsible units and individuals according to the budget. through the implementation of comprehensive budget management, the implementation of the responsibilities and objectives of managers at all levels of enterprises, simplify the approval procedures for various expenditures, increase the efficiency of decision-making, so that enterprises have a stronger ability to adapt to the market.
Fourth, improve the internal management system of the enterprise
The internal management system of the enterprise not only emphasizes the management of the process, but also pays more attention to the quantification of various indicators, especially those that have a significant impact on the financial situation, which can be met in the process of implementing the budget.
The costs and expenses match the corresponding cost drivers, so that the cost and expense expenditure is more reasonable, the financial department supervision and information audit are more based, and the contradiction between the financial department and the business department is also reduced. the budget provides a basis for enterprise performance appraisal, which is conducive to the establishment of a fair and reasonable performance appraisal and remuneration system.
Fifth, establish the basic concept of a comprehensive budget
The holistic view. budgeting is based on the company's strategic objectives and the company's basic strategy in various specific aspects. based on the adjusted organizational structure, a clear division of responsibilities and authorities, and a sound workflow.
Holistic concept. when preparing the budget, each department takes the company's business objectives as the ultimate goal and the capital budget as the basis for preparation. the budgets of each department must cooperate with each other and clarify the relationship of authority and responsibility between each other.
Planning concept. based on the various plans of each department, including the work plan, procurement plan, business development plan, special plan, etc. of each department. the budget is a quantitative embodiment of the work plan and also promotes the clear objectives and interconnection of the work plan.
The concept of responsibility. on the basis of full consultation, each department prepares a budget and approves the overall budget officially issued by the company, and is responsible for the budget implementation and control of the department. the finance department summarizes the budgets of each department, prepares the final budget statements, and is responsible for reporting and issuing the overall budget and various analysis reports in the implementation. the audit department organizes performance appraisal work according to the implementation of the budget and other factors.
The idea of resilience. comprehensive budget management and organizational structure, departmental responsibilities, and business processes cooperate with each other, and implement a hierarchical authorization responsibility system. within the scope of authorization, the management personnel at all levels make independent decisions on daily affairs and make efficient responses according to changes in the market situation.
6. excavate sources of budget information
Information provided by the relevant departments:
- Sales plan, according to the historical number of product sales, combined with market trends and product pricing, to develop annual sales volume forecast.
- The price forecast, the company combines the government department's price limit on the product, the company's pricing strategy, the actual price of the year and the sales department's forecast of the future market and other factors to formulate a price forecast.
- Product cost calculation, according to the sales volume plan, combined with the production process and bill of materials of the product, calculate the cost of the product, and analyze the cost composition.
- Overhead planning, the marketing department, the finance department and the general manager's office and other sales and management departments to develop overhead budgets.
- Reference to the key points for the formulation of annual business objectives
In the early stages of the budget, when setting the company's goals, use key metrics to define the level of performance that the company should achieve; including the company's value target, important investment ratios, such as long-term investment ratio, return on investment, r&d investment ratio, market development ratio, etc. aligning the budget with changes in the market environment facing the company, including:
1. adjust according to the market situation, but should use the same resource allocation procedures and submit a management report that analyzes the budgetary impact of the market situation.
2. in the early stage of budgeting, simulate the market conditions that may be encountered and the factors that affect them, and respond in a timely manner when the company encounters such market conditions.
3. reserve funds that can be used for opportunities for market emergence and seize market opportunities.
4. use other flexible forecasting methods for budget formulation, including budget rolling, etc.
5. continuous planning and forecasting, the organization should have the flexibility to change with market conditions.
8. Reference to the key points of budget implementation and monitoring
The quarterly budget is rigid, and the budget of the same account does not allow budget adjustments between quarters, unless the normal budget adjustment process is followed. monthly adjustments can be allowed for the same account budget in the quarter, and some related expense accounts can be allowed for inter-account adjustments, but for the expenses that the company is prepared to strengthen control, it can be stipulated that monthly and inter-account adjustments are not allowed.
The budgets that have professional departments to check and the costs are implemented to the specific departments with higher costs and do not match their income, the finance department can adopt the method of total quantity control, and the professional departments will carry out specific control and deployment, and the finance will only review whether the total amount is within the budget.
For all actions that result in expenditure, the department manager and the finance department need to review it in conjunction with the department budget. in the process of budget implementation, the scope and strength of assessment of budget differences are clarified.
The acceptable degree of fluctuation of each or category of budget variances within which it is not linked to the results of the performance appraisal. the relevant data of the budget are the data source and basic reference of the key performance appraisal indicators, and the implementation of the budget is included in the performance appraisal management system.
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