Development of budgets structural divisions
The effectiveness of budgeting in planning practice largely depends on the organization of the process. It is necessary to clearly define the procedure planned work, including installation of the budgetary responsible executors and their powers and the timing of the completion of forms for information.
Optional enterprise budgeting may be two schemes. The first stipulates that the work of budgeting starts from "above", and detailed figures communicated to all departments of the company and included in their budgets.
Under the second scheme work on budgeting begins "from below" and their subsequent erection at the firm. It can be mixed version, which includes elements of two previous schemes.
The choice of the development budget depends on the size of the company and its organizational structure. In large firms, senior management typically determines the overall direction of the company, namely the production and profit trends and structure of capital and limits as limits. This planning approach significantly expands the autonomy units and has confirmed liability and pecuniary interest in the outcome of the activity.
Budget planning - it's an ongoing process, which must constantly coordinate budgets of different departments.
The table shows that the budget structural unit - a detailed description of the financing costs associated with industrial activity, other functions. For each type of expenditure (salaries, material costs, etc.). Is your budget, the more detailed. For example, the budget to pay wages contains some categories of employees by types of benefits in terms of payments for payroll taxes.
Factor as budgeting is the existence of reasonable rules and regulations, such as regulations cost of materials, labor costs, statutory transfers to special funds and so on.
The approved budget is justification for the allocation of structural subdivisions of funding. Thus, monthly budgeting structural units gives more precise figures on the cost structure and than is now the current system of accounting. Within the monthly budgets approved structural units will be given greater autonomy in spending and savings budget payroll, which will increase the material interest of workers in the performance targets. The benefits of budgeting are also minimizing the number of control parameters, which leads to a reduction in non-productive working time of employees and economic services.
Thus, budgeting complements the general system of financial planning at the enterprise and enables direct the activities of all departments to achieve the planned level of profitability.