Budget period and minimum budget period. Budget year, budget period, timing of stages of the budget process

22.09.2019

Current and strategic budgeting in industry. In the process of management planning at an industrial enterprise, setting the timing of the budget period plays a very important role. It is necessary to understand that the choice of the time interval that makes up the budget period is not at all a matter of taste; The duration of the budget period is quite strictly determined by the industry and individual specifics of the company, as well as the characteristics of the macroeconomic environment in which it operates. Typically, the key principle on which the length of the budget period is determined is the primacy of strategic planning over operational management. In other words, the current activities of the company are determined by the strategic goals of its development, and not vice versa.

This provision has a definite practical significance when choosing the timing of budget planning. Two extremes that must be avoided are: conducting planned (budgetary) activities solely for the purposes of current management without developing strategic development plans (so-called development budgets). In this case, the enterprise usually draws up short-term budgets for a period of 1 - 3 months.

The disadvantages of this approach are obvious. Budgeting has two main components: planning-analytical and control-incentive. In this regard, the absolutization of short-term budgeting leads to the fact that long-term business development programs with this approach “fall out” of the general mechanism of the budget process. This applies, for example, to long-term investment programs, competitive policies associated with aggressive pricing and sales expansion, etc. For example, when comparing the budget indicators of the reporting and past short-term (monthly, quarterly) budget periods, it may seem that the company suffered losses due to unreasonable reduction of prices - this will be clearly shown by an analysis of the relationship “costs - volume - profit”.

For the current moment in time, this may be true. However, analysis based on a short-term budget will never reveal long-term goals similar policies that may be justified. Let’s say that aggressive dumping pricing may be caused by the desire to oust competitors from the market and, in a year or two, cover current losses by obtaining monopoly profits. An analysis of the comparative effectiveness of investment policy is generally impossible on the basis of a comparison of two successive short-term budget periods, since the payback period for investments, as a rule, is calculated in years, and the effect sometimes has an “explosive” character. So, if a new progressive production line was put into operation during the reporting period, then the analysis will show sharp increase financial results compared to the previous period.

Is it possible to draw a conclusion on this basis? sharp growth production and financial efficiency? Of course not, since obtaining the effect from investments was preceded by large-scale investments, which in previous budget periods were recorded only as expenses that did not give any effect (worsened the balance of cash receipts and expenses, reduced liquidity, etc.).

It should be remembered that in medium and large enterprises the budget process is the regular work of a number of management services, each of which plays its role according to the principle of “checks and balances” so that the budget turns out to be balanced. So, the financial and economic service is playing a game " stingy knight", which, in order to maintain financial stability, constantly cuts costs for other management services (economic planning management, management capital construction, marketing and sales management, etc.). In this regard, the presence of only short-term planning at an enterprise leads to the fact that, objectively, first of all, costs for long-term programs are reduced, which can subsequently have disastrous results for the production and market potential of the company.

The control and incentive function of the budget also “slips” in the absence of long-term planning. The system of material incentives for departments and their managers is based on the results of fulfilling the plan (budget), in other words, the structural divisions of the enterprise are rewarded for positive deviations from the planned budget indicators (reducing unit costs, exceeding sales volumes, etc.). Limiting budget planning to the framework of current management will inevitably lead to the fact that department management will be interested, first of all, in maximizing current performance indicators, even if this comes to the detriment of the medium and long-term development prospects; passion for drawing up long-term programs and business development plans, including budgets in the absence of strict short-term budgeting. The longer the budget period, the more the budget is indicative (non-binding) in nature. This is objectively due to the fact that in the long term, the uncertainty of changes in the macroeconomic environment increases sharply, that is, factors beyond the control of the enterprise and its divisions begin to play an increasingly important role in the execution of the plan.

Thus, the principle of “feedback” is violated - the head of the department, when summing up the results, can always refer to unforeseen circumstances that arose during the budget period. Budget from mandatory plan turns into a set of good wishes.

From the above it follows that the presence of only one (short-term or long-term) budget in a company in most cases negatively affects the effectiveness of management planning. The experience of leading Western companies shows that the most reasonable thing is to use two or even three budgets at the same time, differing in their terms and goals.

The combination of strategic and current planning based on the simultaneous preparation of two or three budgets, differing in duration, is shown in Diagram 1.1

Scheme 1.1 Combined approach to budgeting: a combination of strategic and current planning:

So, the basis for drawing up consolidated budgets is a strategic plan, which defines the main priorities and development goals (including in quantitative terms) and outlines the mechanisms for achieving the goals. Based on the strategic plan, three consolidated budgets are developed: one short-term budget and two long-term budgets (development budget and indicative “rolling” budget). Budgets vary in terms of terms, functions, degree of obligatory execution, and the possibility of adjustment.

A. Short-term budget (1-3 months). For Russian enterprises the most optimal period for short-term (current) budgeting is 3 months (quarter). This coincides with the frequency of fiscal reporting (quarterly consolidated financial statements submitted to tax office), which greatly facilitates the work of the enterprise’s accounting department, which is the main “information” center of the enterprise. The short-term budget is characterized by:

* mandatory execution. The short-term budget is the law for the structural divisions of the enterprise and their managers. Failure to meet budget targets is considered a failure to implement the plan in Soviet times. Accordingly, units are automatically deprived of bonuses, organizational conclusions are made, etc.;

* no adjustments. The short-term budget is adjusted in exceptional cases with the approval of the enterprise's senior management. Adjustments to the short-term budget can only be caused by force majeure circumstances (sudden changes in market conditions, unexpected government decisions, etc.). The results of the implementation of the short-term budget are summed up based on a comparison of actual indicators with the planned ones established at the beginning of the budget period. This is due to the fact that in the short term the degree of uncertainty in the macroeconomic environment is low, therefore the process of implementing the plan depends mainly on the structural units themselves. Consequently, the budget must be given maximum rigidity, which strengthens the control and incentive function of budgeting;

* global character control and incentive function of the budget. Based on budget execution, they are awarded or deprived of bonuses, certified, promoted or demoted in position and wages all personnel of the enterprise up to senior management. It is the indicators of short-term budget execution that underlie the Regulations on material incentives for enterprise employees;

* high degree detailing budget indicators. Thus, for sales divisions, not just the total value of the planned sales volume is established, but also its structure by type of product; production divisions receive a budget disaggregated by cost items in the context of individual production lines; management services, as an integral part of the budget assignment, are required to comply with strictly established staffing table, the amount of travel and administrative expenses, etc.;

B. Development budget (1 year). This budget is classified as long-term. It is characterized by:

* mandatory execution. At the beginning of the year, the enterprise adopts a short-term budget (for a quarter) and a development budget (for 1 year), and subsequently the adoption of quarterly budgets is within the framework of the development budget.

* possibility of adjustment. Adjustments to development budget indicators are commonplace, although adjustments to budget indicators for the current quarter are, as a rule, not allowed. This is due to the fact that over a period of 1 year, the uncertainty of the macroeconomic environment is very high and plays an important role in achieving the initially planned indicators. In this regard, the quarterly budget for the 4th quarter is the difference between the adjusted development budget and the total planned indicators for the 1st - 3rd quarters;

* selective nature of the control-stimulating function. As a rule, heads of structural divisions (top and middle management) are rewarded for achieving and exceeding annual targets, rather than ordinary department employees. This is due to the fact that staff turnover is usually much higher for ordinary employees than for managers. Therefore, ordinary personnel are more interested in short-term rewards for work, while managers look at their prospects within the framework of this enterprise.

True, this circumstance is purely individual for each company. For example, for the so-called city-forming enterprises (such as the Kondopoga pulp and paper mill or the Magnitogorsk Iron and Steel Works), where the turnover of employees is low, and bonuses can be practiced for ordinary personnel based on the results of work for the year;

* less detail of budget indicators.

In the development budget, most often, only integral cost values are recorded, for example, gross sales volume, total cost estimate for a department, etc. This is quite reasonable, since low-level budget indicators are only a means of achieving integrated cost target values, and not an end in themselves. For example, sales income a separate type products are valuable not in themselves, but as part of total sales. If the sale of another type of product is comparatively more profitable, the sales structure will change. Therefore, excessive detail of annual indicators is not only useless in conditions of market uncertainty, but also harmful;

* the presence of a revenue component in the investment budget (1st level subbudget included in the consolidated budget). The structure of the consolidated budget of an industrial enterprise is of the same type and does not depend on the duration of the budget period. Another thing is that when drawing up an investment budget for the current period (month or quarter), planning for the disbursement of funds under long-term investment programs is carried out from the achieved level (at the beginning of the period) in accordance with the investment budget included in the development budget. In other words, the long-term investment program as a separate planning object (including parameters of total capital and current costs, gross and net revenues, payback, etc.) appears only in the long-term development budget.

Within the short-term (monthly or quarterly) budget, actually as " investment planning"you can determine local equipment purchases with short term installation caused by current (of a given budget period) budget plans for production and sales. For this component of investment there is a financial and economic justification arising from budget plans for the short-term period. The inclusion of indicators for the planned disbursement of funds or the timing of the commissioning of long-term capital construction projects in the short-term budget plan is made on the basis of a schedule for the disbursement of funds with a total duration exceeding the short-term budget period (of course, with adjustments to the current situation, such as the availability of financial resources in excess of current production needs, etc.).

Thus, investment income, strictly speaking, is a parameter only of a long-term development budget, when within one budget period it is possible to compare the costs incurred and the income received, that is, to assess the magnitude of the effect of investments. Despite the fact that investment income on capital construction projects being commissioned is included in the short-term budget plan, its value is not taken into account when comparing the financial results of the enterprise for the reporting and previous short-term budget periods. Here, only financial results from current operations are taken into account. This is quite natural, since the result obtained from investments is due to costs that could be incurred over many short-term budget periods.

B. Indicative "rolling" budget (1 year). This is a special kind of budget. It is adopted at the beginning of the year and is completely similar to the development budget (that is, at the beginning of the year only two budgets are adopted - the development budget for 1 year and the short-term budget for 1 quarter). After the expiration of the 1st quarter, another quarter is added to the “rolling” budget (I quarter of the next year), after the expiration of the 2nd quarter - the 2nd quarter of the next year, etc. This ensures continuous 12-month planning. This circumstance is very important for the effectiveness of management planning at the enterprise. Adjustments to the development budget and the adoption of the next quarterly budget during the year occur simultaneously and on the basis of the development of the next “rolling” annual budget. Thus, when revising the volume of investments in the third quarter of the development budget, managers must know the situation not only before the end of the year, but also for the year ahead (counting from the beginning of this quarter), otherwise the adjustment of the investment policy may not be sufficiently justified. Indicative "rolling" budget:

* not only is not mandatory, but by definition is never performed and serves for purely analytical purposes. There is no control-stimulating function in it;

* the detail of budget indicators is the same as in the development budget.

Thus, the combination of two long-term consolidated budgets and one short-term budget makes it possible to pursue a management policy in which the strategic and current goals of the enterprise are balanced and interconnected. This approach is advisable to use at large industrial enterprises, where additional costs for conducting planning and analytical work are justified in the context of improving the quality of adoption management decisions.

For medium-sized enterprises, we can recommend planning based on two budgets (short-term quarterly budget and annual development budget).

For small businesses, as a rule, it is reasonable to practice only current planning with the preparation of only quarterly budgets. Small companies, at their core, are most dependent on external factors of market conditions and at the same time can most flexibly “adjust” their resource potential to market changes. For them, the future in a year or two is Hume's "black box". Therefore, for small businesses, drawing up long-term budgets is most often akin to building “castles in the air.” It’s better not to do this from a saving point of view cash, and just to avoid illusions, you need to set real goals for yourself.

In the process of management planning at an industrial enterprise, setting the timing of the budget period plays a very important role. It is necessary to understand that the choice of the time interval that makes up the budget period is quite strictly determined by the industry and individual specifics of the company, as well as the characteristics of the macroeconomic environment in which it operates.

Two extremes that must be avoided are: conducting planned (budgetary) activities solely for the purposes of current management without developing strategic development plans (so-called development budgets). In this case, the enterprise usually draws up short-term budgets for a period of 1-3 months.

In this regard, the absolutization of short-term budgeting leads to the fact that long-term business development programs with this approach “fall out” of the general mechanism of the budget process.

The presence of only one (short-term or long-term) budget in a company in most cases negatively affects the effectiveness of management planning. The experience of leading Western companies shows that the most reasonable thing is to use two or even three budgets at the same time, differing in their terms and goals.

The combination of strategic and current planning based on the simultaneous preparation of two or three budgets, varying in duration, is shown in the figure.

Figure 8.1 Combined approach to budgeting:

combination of strategic and current planning

Budgets vary in terms of terms, functions, degree of obligatory execution, and the possibility of adjustment.

Short-term budget (1-3 months). For Russian enterprises, the most optimal period for short-term (current) budgeting is 3 months (quarter). This coincides with the frequency of preparation of fiscal reporting (quarterly consolidated financial reports submitted to the tax office), which greatly facilitates the work of the enterprise’s accounting department, which is the main “information” center of the enterprise. The short-term budget is characterized by:

Mandatory performance.;

No adjustment;

The global nature of the control and incentive function of the budget;

High degree of detail of budget indicators;

Development budget (1 year). This budget is classified as long-term. It is characterized by: mandatory execution. At the beginning of the year, the enterprise adopts a short-term budget (for a quarter) and a development budget (for 1 year), and subsequently the adoption of quarterly budgets is within the framework of the development budget.

Thus, in principle, the budget for the fourth quarter is obtained by calculation by subtracting the total planned indicators for the first three quarters from the planned indicators of the development budget; possibility of adjustment. Adjustments to development budget indicators are commonplace, although adjustments to budget indicators for the current quarter are, as a rule, not allowed. This is due to the fact that over a period of 1 year, the uncertainty of the macroeconomic environment is very high and plays an important role in achieving the initially planned indicators.

Indicative "rolling" budget(1 year). This is a special kind of budget. It is adopted at the beginning of the year and is completely similar to the development budget (that is, at the beginning of the year only two budgets are adopted - the development budget for 1 year and the short-term budget for the first quarter). After the expiration of the first quarter, another quarter is added to the “rolling” budget (the first quarter of the next year), after the expiration of the second quarter - the second quarter of the next year, etc. This ensures continuous 12-month planning. This circumstance is very important for the effectiveness of management planning at the enterprise. Adjustments to the development budget and the adoption of the next quarterly budget during the year occur simultaneously and on the basis of the development of the next “rolling” annual budget.

Thus, the combination of two long-term consolidated budgets and one short-term budget makes it possible to pursue a management policy in which the strategic and current goals of the enterprise are balanced and interconnected. This approach is advisable to use at large industrial enterprises, where the additional costs of conducting planning and analytical work are justified in the context of improving the quality of management decisions.

For medium-sized enterprises, we can recommend planning based on two budgets (short-term quarterly budget and annual development budget).

For small businesses, as a rule, it is reasonable to practice only current planning with the preparation of only quarterly budgets.

8.3. Current and strategic planning in industry.

The purpose of developing an enterprise development strategy is to identify the main directions for its further development based on the maximum use of scientific, technical, production and personnel potential. Strategic planning typically involves developing long-term plans spanning 10-15 years. When developing long-term plans, the main directions in which the enterprise will develop are determined, the content and sequence of implementation of the most important organizational, economic and technical measures are established to ensure the achievement of the main goals.

The stages of the strategic planning process for a market-oriented enterprise are presented in Fig. 8.2.

Figure 8.2 Diagram of the strategic planning process for a market-oriented enterprise

Based on a strategic long-term development plan for the enterprise, designed for 10-15 years, long-term plans development for 5-10 years.

Based on these plans, taking into account the changes that have occurred over a given period, plans for the year are developed. Such plans are called current. IN modern conditions the most relevant type of current planning, taking into account both existing areas of operation of the enterprise and new areas - business plan .

It should be said that there is no enterprise development plan strictly regulated by sections. Based on the practice of enterprises and the recommendations of a number of authors, it is recommended to include the following sections in the development plan:

1. The central section of the enterprise development plan is production plan (production program), which sets targets for the production of certain types of products in physical and value terms, and provides for further improvement of product quality.

2. Marketing plan - a relatively new section of the development plan. It provides a forecast for the development of the target market, identifies the most significant advantages and significant disadvantages of the enterprise’s activities in this market, and identifies the main problems that require urgent solutions.

3. An important part of the enterprise development plan is plan scientific research and developments . It includes activities on research and development, development of production of new types of products, and introduction of advanced technology.

4. The investment and capital construction plan provides for investments in the construction of new, expansion and reconstruction of existing enterprises, replacement of outdated equipment with new, more productive ones, improvement of production technology, mechanization and automation of production processes.

5. Each enterprise in one form or another can carry out foreign economic activity . Planning of this activity takes place in the corresponding section of the enterprise development plan - in terms of foreign economic activity .

6. The logistics plan is a system of material calculations reflecting production and consumption the most important species industrial products, plans for their implementation.

7. During development labor and personnel plan the main task is to provide for a systematic increase in labor productivity as the main condition for increasing production volume and increasing its efficiency.

8. All sections of the enterprise development plan are closely interconnected. The generalizing section of the plan, which reflects the results of the previous sections, is the plan for the costs of production and sales of products.

9. In the financial plan, the most important financial indicators: calculation of the need for own working capital and a task to speed up their turnover; interaction of the enterprise with the state budget; creation and use of basic production assets, profit target.

10.Important to prevent pollution environment, as well as rational use natural resources has the final section of the enterprise development plan - environmental and environmental activities , including such areas as protection and rational use water resources, air protection, protection and rational use of land, protection and rational use of mineral resources.

Development of a general budget for an industrial enterprise

1.3 Selecting the duration of the budget period. Types of budgets by duration

For the current moment in time, this may be true. However, analysis based on short-term budgets will never reveal the long-term goals of such policies, which may be justified. Let’s say that aggressive dumping pricing may be caused by the desire to oust competitors from the market and, in a year or two, cover current losses by obtaining monopoly profits. An analysis of the comparative effectiveness of investment policy is generally impossible on the basis of a comparison of two successive short-term budget periods, since the payback period for investments, as a rule, is calculated in years, and the effect sometimes has an “explosive” character. So, if a new progressive production line was put into operation during the reporting period, then the analysis will show a sharp increase in financial results compared to the previous period.

Is it possible to draw a conclusion on this basis about a sharp increase in production and financial efficiency? Of course not, since obtaining the effect from investments was preceded by large-scale investments, which in previous budget periods were recorded only as expenses that did not give any effect (worsened the balance of cash receipts and expenses, reduced liquidity, etc.).

It should be remembered that in medium and large enterprises the budget process is the regular work of a number of management services, each of which plays its role according to the principle of “checks and balances” so that the budget turns out to be balanced. Thus, the financial and economic service plays the part of the “miserly knight”, who, in order to maintain financial stability, constantly cuts costs to other management services (economic planning department, capital construction department, marketing and sales department, etc.). In this regard, the presence of only short-term planning at an enterprise leads to the fact that, objectively, first of all, costs for long-term programs are reduced, which can subsequently have disastrous results for the production and market potential of the company.

Thus, the principle of “feedback” is violated - the head of the department, when summing up the results, can always refer to unforeseen circumstances that arose during the budget period. The budget turns from a mandatory plan into a set of good wishes.

The combination of strategic and current planning based on the simultaneous preparation of two or three budgets, differing in duration, is shown in Diagram 1.1

Scheme 1.1 Combined approach to budgeting: a combination of strategic and current planning:

A. Short-term budget (1-3 months). For Russian enterprises, the most optimal period for short-term (current) budgeting is 3 months (quarter). This coincides with the frequency of preparation of fiscal reporting (quarterly consolidated financial reports submitted to the tax office), which greatly facilitates the work of the enterprise’s accounting department, which is the main “information” center of the enterprise. The short-term budget is characterized by:

* mandatory execution. The short-term budget is the law for the structural divisions of the enterprise and their managers. Failure to meet budget targets is seen as a failure to implement the plan in Soviet times. Accordingly, units are automatically deprived of bonuses, organizational conclusions are made, etc.;

* global nature of the control and incentive function of the budget. Based on budget execution, all personnel of the enterprise up to senior management are awarded or deprived of bonuses, certified, promoted or reduced in position and wages. It is the indicators of short-term budget execution that underlie the Regulations on material incentives for enterprise employees;

* high degree of detail of budget indicators. Thus, for sales divisions, not just the total value of the planned sales volume is established, but also its structure by type of product; production divisions receive a budget disaggregated by cost items in the context of individual production lines; management services, as an integral part of the budget assignment, are required to comply with a strictly established staffing schedule , the amount of travel and administrative expenses, etc.;

B. Development budget (1 year). This budget is classified as long-term. It is characterized by:

* less detail of budget indicators.

In the development budget, most often, only integral cost values are recorded, for example, gross sales volume, total cost estimate for a department, etc. This is quite reasonable, since low-level budget indicators are only a means of achieving integrated cost target values, and not an end in themselves. For example, income from sales of a particular type of product is valuable not in itself, but as part of total sales. If the sale of another type of product is comparatively more profitable, the sales structure will change. Therefore, excessive detail of annual indicators is not only useless in conditions of market uncertainty, but also harmful;

Within the framework of a short-term (monthly or quarterly) budget, as “investment planning” itself, one can define local purchases of equipment with a short installation period, caused by current (of a given budget period) budget plans for production and sales. For this component of investment there is a financial and economic justification arising from budget plans for the short-term period. The inclusion of indicators for the planned disbursement of funds or the timing of the commissioning of long-term capital construction projects in the short-term budget plan is made on the basis of a schedule for the disbursement of funds with a total duration exceeding the short-term budget period (of course, with adjustments to the current situation, such as the availability of financial resources in excess of current production needs, etc.).

* not only is not mandatory, but by definition is never performed and serves for purely analytical purposes. There is no control-stimulating function in it;

* the detail of budget indicators is the same as in the development budget.

Thus, the combination of two long-term consolidated budgets and one short-term budget makes it possible to pursue a management policy in which the strategic and current goals of the enterprise are balanced and interconnected. This approach is advisable to use at large industrial enterprises, where the additional costs of conducting planning and analytical work are justified in the context of improving the quality of management decisions.

For medium-sized enterprises, we can recommend planning based on two budgets (short-term quarterly budget and annual development budget).

For small businesses, as a rule, it is reasonable to practice only current planning with the preparation of only quarterly budgets. Small companies, at their core, are most dependent on external factors of market conditions and at the same time can most flexibly “adjust” their resource potential to market changes. For them, the future in a year or two is Hume's "black box". Therefore, for small businesses, drawing up long-term budgets is most often akin to building “castles in the air.” It’s better not to do this, both from the point of view of saving money, and simply to avoid illusions - you need to set real goals for yourself.

Budget financing

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Budget period and minimum budget period

When developing and implementing budget regulations, first of all, determine budget period or, as it is also called, financial planning horizon for an enterprise or firm.

Budget period- this is the period for which budgets are drawn up and during which budgets are adjusted and their implementation is monitored. It must be remembered that different budgets must have a unified budget period. It is another matter to divide each budget period into subperiods, i.e. determination of the minimum budget period. Depending on the specifics of the business, different budgets may have different minimum budget periods.

Minimum budget period- unit of measurement of the budget period (quarter, month, decade, week, day) by type of budget.

The budget period should not be confused with the budget cycle. Within a separate budget period and individual directive And indicative here parts can be allocated several budget cycles depending on the duration of the financial planning step.

Directive part of the budget period- this is the time of planning, when targets and mandatory standards are adopted and approved. Within this part, it is customary to strictly control financial indicators and prevent them from changing (especially downward).

Indicative part of the budget period- planning period, within which only general guidelines are established for the company’s financial plans. This circumstance must be kept in mind when determining the budget period. Abroad, companies (especially large ones with large analytical resources) draw up budgets for 3-5 years.

It is also important to understand the areas of application of budgeting. As a process of drawing up financial plans and estimates, budgeting is applicable to many objects at different levels of management; a company or enterprise as a whole, a separate structural unit (budget of a department, workshop, site, etc.), a work program or management function (business expenses budget, sales budget, etc.), a separate contract or project, specially designated centers accounting (profit centers, cost centers, venture centers, etc.). When setting up budgeting as process important to define it object. For budgeting how management technology It is also important to determine the levels of preparation and consolidation of budgets (consolidated and so-called master budgets), corresponding to the levels of the management hierarchy (budgets subsidiaries or financial responsibility centers).

When setting up budgeting, you should know that there are universal rules, methods and procedures strictly described in economic literature or enshrined in accounting regulations. can't. Consequently, budgeting is always a space for creativity, since every enterprise, every large and small company is unique and inimitable. This means that their internal budgeting systems can be inimitable and unique.

REMEMBER! If a company similar to your company in terms of economic profile, production technology, size and management systems has already installed budgeting and management accounting, then copy this management technology, you are unlikely to be able to transfer it to your soil. It is better to develop your own from the very beginning, since business goals and strategies, conditions and problems economic activity Your company may be different.

For some companies it is important to increase turnover (sales volume), for others it is important to increase the mass of marginal profit, and still others may not even know what marginal profit is and how to calculate it. For them, the rate of net profit is more important. The structure of product costs and the set of critical (most important or scarce) resources can also be different at two outwardly very similar enterprises. Hence the discrepancies between technologies and budgeting regulations. But this is not enough. The requirements for financial management systems of an enterprise as a whole, the conditions for using certain financial management tools and systems, and the organization of financial services are constantly changing.

In the industrial era, everything in the management of companies was built on the division of labor. Especially in financial management. The treasurer controlled the cash flow of the company, the chief accountant-controller controlled profits and losses, and the chief financial manager controlled the movement of balance sheet accounts. The latter tried to manage finances based on the final data received from other financial managers. As a result, the fragmentation of financial information for each manager gave rise to fragmented management decisions, when the optimization of one part did not at all mean the optimization of the whole.

As for an entrepreneur or company manager in the information era, he simply has no other choice but to know everything about his business. And it turns out that traditional system financial reporting will no longer help him, since it will not allow him to recreate a holistic picture of the financial situation in the enterprise or company. Any most advanced and carefully developed financial reporting system usually characterizes only certain aspects of economic life. Moreover, the more complete the company’s financial statements, the more carefully developed the system for obtaining and processing financial information, the more difficult it is to use it in the process of making management decisions. It turns out that the most complex and most complete financial reporting system, integrating the maximum possible number of indicators of economic activity, assessment of costs and results, is not always the best and most effective.

In the planning process, an important role (one might say one of the most important) is played by the determination of deadlines.
The period is established in accordance with the specifics of the activity, the goals set, the structure of the enterprise, i.e. the timing and belonging to a particular period are determined depending on the strategic goals.
When determining the budget period, you should avoid:
1) carrying out planned activities for purposes not related to determining the strategy of the company. This is due to the fact that budgeting is based on the main principles: planning-analytical and control-incentive, and therefore, if this error is made, long-term plans are eliminated from the overall budget process. An example is the situation when, after the budget period, when analyzing deviations of actual indicators from planned indicators, the impact on the financial result of understating prices for products is revealed;
2) the dominance of long-term planning over short-term planning. It is known that the longer-term the budget, the more uncertainty it contains.
Having only a long-term or short-term budget has negative influence on the planning process, and therefore on making management decisions in the future.
So, for more effective planning, you need a combination of strategic and short-term plans, which are divided by duration:
1) short term plan, or short-term budget, which is drawn up for a period of 1-3 months. The most effective is the quarterly plan in connection with the delivery tax reporting once a quarter. This type of plan is characterized by:
a) mandatory execution (is in a sense a law);
b) absence of corrective actions (due to the short-term nature of planning and the smallest risk of occurrence of factors influencing the failure of the plan);
c) a control and incentive function, which is involved more than in other types of planning (a system of rewards for plan performance indicators or deprivation of bonuses due to low results);
d) detailing of indicators at a high level;
2) strategic (long-term) plan:
a) the development budget is drawn up for a period of more than one year and has the following characteristics: mandatory execution; the ability to take corrective actions; control and incentive actions of a selective nature (bonuses based on the results of achieving planned indicators are given only to heads of structural divisions); average detail of planned indicators;
b) a rolling budget is a special kind of annual budget. Its essence lies in the fact that after the end of the budget period (say, the first quarter), the first quarter of the next year is added to it, which allows for continuity of planning.

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