The budgeting system as a competitive advantage of the Company.
Based on the results of the implementation of budgeting systems, InBridge Consulting informs the Companies: how it is done and how it is proposed to do it.
Budgeting is a process of planning the future activities of a Company, formalized by a system of budgets.
Benefits of using a budgeting system:
the formation of forward-looking thinking;
identifying short-term problems;
coordination of the activities of structural units;
formation of the basis for the management and control system;
providing a system of opportunities.
The main conceptual stages of budgeting
How Companies do it
1. Choosing a list of types of budgets, centers of monetary responsibility, to a greater extent, from the web, without taking into account the specifics of the Company's activities.
2. Simultaneous provision of budgeting tasks for all CFDs with the establishment of a deadline.
3. Approval of budgets.
How it is proposed to do it
1. Drawing up a budget resolution of the owner to determine the main directions of budgetary policy for the next budget year.
2. Development of draft types of budgets, centers of financial responsibility in accordance with the types of activities.
(for example: "Sales budget", "Production budget", "Delivery budget")
The number and types of budgets, monetary responsibility centers are required to cover all the activities of the Company.
3. Giving the task to the marketing department (sales department) of drawing up, first of all, the "Sales budget" for January-December 2022.
4. After drawing up the "Sales Budget", transfer it to the production unit for the formation of the "Production Budget" based on the "Sales Budget", taking into account the duration of production.
That is, the "Production budget" must be drawn up for the period December 2021, January - December 2022
5. After drawing up the "Production budget", transfer it to the supply department to draw up a "Supply budget" taking into account the remaining raw materials and their delivery time, for example, for the period November 2021, December 2021, January-December 2022.
6. On the basis of all budgets for the preparation of P&L, CF, Balance.
7.Analysis of compliance with the owner's resolution on compliance with the main indicators: margin, financial cycle, capital turnover, etc.
8. In case of compliance - approval of budgets and control of execution.
9. In case of non-compliance - changing the parameters of the "Sales budget", with subsequent recalculation in the order of the "Production budget" and "Delivery budget".
The budgeting system will form the Company's competitive advantages only if it is correctly formed and used.