Zamoroka M.O.
Bozhok N.O.
National University of
Food Technologies
BUDGETING
TECHNOLOGY AS A TOOL OF ENTERPRISE MANAGEMENT
Nowadays
the competition on a job market is so strong, that companies that tend to be
successful have to be ahead of their competitors not only in a level of their
technology and the rates of basic operations, but also in a quality of control
systems. There is a large amount of notions of the terms budget and budgeting
both in national and foreign literature, yet there is a little difference
between them that is not principal.
According to
E.S.Stoyanova, budget is a “numerical implementation of the plan that
characterizes income and expenses for a specific period, and the capital needed
to achieve a certain goal” [1, 411].
Ch.T.Khornehen and J.Foster define budget as “a quantitive expression of
the plan, the tool of coordination and control of its performance” [3, 249].
K.V.Schyborsch identifies this term as “a quantitive expression of centrally
set indicators of the plan of the enterprise for a certain period” [ 4, 4].
Budget is also considered as “a financial, quantitatively defined expression of
marketing and productive plans which is necessary to reach a set goal”.
So, budgeting is the process of formation and
realization of a document that contains quantitative indicators, in a practical
activity of a company. Therefore, it is worth implementing the term of budget
management as a mixture of principles, methods, means and instruments
of management on the basis of budget. In our opinion, all functions of
budgeting are restricted to the major three: planning, control and motivation.
The most common
purpose of budgeting is the improvement of the efficiency of the company by
enhancing the functions of planning and control. Fulfilling their functions,
budget and technology of budgeting solve the following problems:
· in production: improvement of
efficiency of cost management; cost optimization and cost reduction;
coordination of purposes and tasks of all production units with the strategy of
the whole company; motivation of the heads of departments;
· in financial management:
prioritization of the usage of financial resources; improvement of management
of liquidity and financial stability; perspective financial analysis;
prognostication and management of the future financial condition of the
company.
Financial budgets
enable to forecast financial position of the enterprise, reveal critical
periods, status of the liquidity gap and get ready to prevent critical
situations by means of balancing budget indicators. Major carriers of budget
information are budget tables. Budget is always a document with clearly defined
structure and interrelationships between indicators. Almost all theorists and
practitioners of budgeting distinguish two levels of budgets – operational and
financial. On the operational level, budgets characterize current (productive)
activity representing data for budget revenue and expenditure. The only type of
operational budget, typical for every system of budgeting, is sales budget
which reflects projected revenues of the company and the level of future
business activity.
Generalization of operational data
and balancing of a number of financial indicators are conducted on the
financial level. There are both natural and monetary (financial) indicators
within operational budgets, whereas financial budgets contain articles that are
expressed only in a financial form.
Expediency of
implementation and support of budgeting at the domestic enterprises of all
industries, sizes and activities is determined by the fact that the
construction and analysis of budget forms provides management of the company
with the information for reasoning and prediction of the consequences of a
certain managerial decision (productive, investment, marketing etc.),
evaluation of the results, reached by the company, compared to the objectives
that were set by the financial plans of the previous periods.
We can conclude that budgeting is not only a
tool of balancing of income and expenses, but also a mechanism of coordination
of the flow of all economic processes of the enterprise and is the means to
achieve strategic goals.
References:
1. Financial Management: high school manual/E.S.Stoyanova and
others.-M.:”Perspectiva,”2010.-537 p.
2. Intra Budgeting/ V.E.Khrutsky, T.V.Syzova.- M.:
“Finance and statistics,” 2002.- 542 p.
3. Management Accounting/ Ch.T.Khornehen, J. Foster.-SPb, 2005.-521p.
4. Budgeting of industrial activities/ K.V.Schyborsch.-M.:”Business and
Service,”2001.-348p.