Operating budgets

As already noted, an appropriate budget is prepared for each CFD. The number of operating budgets cannot be more or less than the number of responsibility centers.

The main task of drawing up operating budgets is planning and monitoring the results of the activities of the Central Federal District, i.e.

The operating budget fully describes the activities of the responsibility center and all its business operations in the language of finance.

The activities of the unit begin with planning the results of its activities with a description of the action program, therefore, the budgeting of the Central Federal District is carried out upon planning the activities of the responsibility center. Upon planning, the resources that will be consumed to achieve the planned result are calculated.

The operating budget is a tool for delegating financial authority to the head of the CFD. Naturally, the delegation of authority will be accompanied by responsibility for the results of the activities of the CFD, which will be expressed in the form of profit margins, marginal profit, income or costs (depending on the status of the responsibility center).

With correct and correct planning, for each responsibility center, articles and expenditure rates should be drawn up, which are calculated in the budget depending on the planned income of the CFD or the company. Financial service should monitor the compliance of the costs incurred by the FRC with both the approved budget and the planned revenues.

In the event that the revenue side of the budget is not respected, its expenditure side should also be reviewed. Variable items of expenditure should be recalculated based on the results achieved. Fixed costs for the CFR should not be increased by decreasing the absolute value variable costs due to the decrease in income. For example, let the CFD budget be approved at the level of 100,000 rubles. These data are calculated for the Central Federal District based on the sales volume of 200,000 units. Expenses of 100,000 rubles. for this CFD were calculated based on the variable component in the amount of 2% of sales and the constant component of 60,000 rubles. Sales were at the level of 150,000 units. Accordingly, the total costs of this CFD should have been 90,000 rubles. However, the head of the Central Federal District decided on the non-target distribution

Organization budget management in the company according to the Central Federal District 217, the circulation of funds and carried out additional expense at 10,000 rubles. This example demonstrates the need to normalize not only the absolute value of expenditures, but also those items for which they were made. Therefore, for the purposes of control, a list of possible expenditure items for the Central Federal District and their amounts will be needed.

Functional budgets

Functional budgets are built on the basis of the functions of the company's activities - its business processes. A typical company carries out following features:

procurement;

sales;

transportation;

management, etc.

Budget items, which are formed according to the relevant functions of the company, constitute the functional budgets of the company. The main purpose of functional budgets is to calculate the company's need for resources to carry out the relevant functions.

Companies need to establish the relationship between functional and operating budgets. For example, such a functional budget as the “purchase budget” is also the operating budget of the Central Federal District - the supply department. Each functional budget is compiled as a whole for the entire company, so the system of functional budgets forms its budget structure. The principle of forming functional budgets is to group them by type of activity (functions, processes) of the company.

As an example, we can highlight such company functions as sales, purchasing, warehousing and storage, advertising and marketing, transportation and management. Accordingly, the grouping of the specified functional budgets may look as shown in Fig. 3.3.

IN this case, unlike the final budgets by cost elements, the budgets formed by the final cost elements (for example, labor costs, material costs etc.). This is due to the fact that this presentation of budgets is formed by the types of activities of the company in the context of its commercial activities and management. In table. 3.5 is an example of a possible list of the company's functional budgets.

218 Chapter 3 Budget business expenses

Sales budget

Travel budget

Cost budget for warehousing and storage

Supply budget

Management budget

Rice. 3.3. An example of the composition of the company's functional budgets Table 3.5. Possible list of functional budgets 1.

Sales budget 1.1.

Goods sales budget 1.2.

Fixed assets sales budget 1.3.

Other implementation budget 2.

Procurement budget 2.1.

Procurement budget and direct costs attributable to cost 2.1.1.

Goods procurement budget 2.1.2.

The budget of transportation costs related to the cost 2.1.3.

Budget for customs clearance costs 2.2.

Procurement budget for the expenses of functional services in the Central Federal District 2.2.1.

Procurement budget for sales needs 2.2.2.

Procurement budget for warehousing needs 2.2.4.

Procurement budget for the needs of TPP 2.2.5.

Procurement budget for management needs 2.3.

Procurement budget for fixed assets and capital investments

Organization of budgetary management in the company according to the Central Federal District 219 3. Budget of commercial expenses 3.1.

Marketing expenses budget 3.1.1.

Sales budget (sales department 1) 3.1.2.

Sales budget (sales department 2) 3.2.

Transportation budget 3.3.

Storage budget 3.3.1.

The budget for the costs of acceptance, placement and packaging 3.3.2.

Budget for the costs of documenting 3.4.

Marketing department budget 3.5.

Supply budget 3.5.1.

The budget of expenses of the sector of foreign economic activity 3.5.2.

Expenditure budget for the customs clearance sector 3.5.3.

Cost budget for the certification sector 3.6.

Project budget 3.6.1.

Expenses budget for current projects 3.6.1.1.

Project costs 1 3.6.1.2.

Project costs 2 3.6.1.3.

Project costs 3 4.

Administrative expenses budget 4.1.

The budget of expenses for financial management 4.2.

IT Directorate's Expenses Budget 4.3.

Expenditure budget of AHO 4.4.

Expenses budget of the secretariat and office managers 4.5.

Legal service budget 4.6.

Personnel service budget 4.7.

Expenditure budget of the CEO 5.

Tax budget 5.1.

VAT budget 5.2.

Budget for payroll 5.3.

Budget fees in PF 5.4.

Tax budget for vehicle owners 5.5.

Income tax budget 5.6.

Land tax budget 6.

Personnel budget 7.

Budget for balances of goods and stocks at the beginning of period 8.

Budget for balances of goods and stocks at the end of the period 9. Budget accounts receivable at the start of period 10.

Accounts receivable budget at the end of period 11.

Budget accounts payable at the start of period 12.

Accounts payable budget at the end of the period 13.

Budget investment activity 13.1.

Investment budget 13.1.1.

Investment project A 13.1.2.

Investment project B 14.

Budget financial activities 14.1.

Equity budget 14.2.

The budget for the payment of interest on attracted capital 15.

Cash flow budgets 15.1.

Income budget for core activities 15.2.

Income budget from clients 15.3.

Budget of payments for core activities 15.3.1.

Payment schedule for goods 15.3.2.

Schedule of payment of expenses relating to the cost of goods 15.3.3.

Payment schedule for business expenses 15.3.4.

Payment schedule for administrative expenses 15.3.5.

Schedule of tax payments 15.4.

Budget for other payments and receipts 15.5.

Income budget for financial activities 15.5.1.

Income budget for UV and other funds 15.5.2.

Budget of receipts of credits and loans 15.6.

Budget of payments for financial activities 15.6.1.

Credit and loan repayment budget 15.6.2.

Budget for payment of interest on credits and loans 15.6.3.

Dividend payment budget 15.7.

Income budget for investment activities 15.7.1.

Income budget in the form of payments for fixed assets 15.7.2.

Dividend income budget from participation in the share of other companies 15.8.

Budget of payments for investment activities 15.8.1.

Budget for payments for the acquisition of fixed assets and capital investments 15.8.2.

Budget for payments in the form of acquisition of a share in the financial unit of other companies 15.9.

Income budget for other activities 15.10.

Budget for payments for other activities

Organization of budget management in a company according to the CFR 221 Depending on the needs of the company, the budgets of the highest level (listed in the table) can be detailed up to budgets of more than low level, and those (in turn) can also be further refined. For example, a material cost budget can be broken down into a fuel budget, a fuel consumption budget, and so on.

Depending on the needs of the company, the top-level budgets (listed in the table) can be drilled down to lower-level budgets, which (in turn) can also be drilled down further. For example, a material cost budget can be broken down into a fuel budget, a fuel consumption budget, and so on.

The relationship between functional and operating budgets is presented in Table. 3.6 - on the example of the sales budget. It shows the interconnection of budgets by income from sales. In a similar way, the interconnection is built on expenditure budgets and cost centres.

Table 3.6. Interrelation of functional and operating budgets Functional budget of the company Name of the Center of income/costs BDR BDDS Balance Center of income "Wholesale sales, region 1" Sales revenues by region 1 Sales revenues by region 1 Assets

divisions by region 1 1 Sales, product A 2 Sales, product B 3 Sales, product C Functional sales budget for the company Revenue center "Wholesale sales, region 2"

4 Sales revenue by region 2

Sales, item A Sales, item B Sales, item C Sales proceeds by region 2 Assets

divisions by region 2

Functional budgets can be called the core of the entire enterprise planning system, because it is on their basis that the main budgets are compiled. Let's analyze the main groups of functional budgets.

Functional budgets can be roughly divided into three groups:

• operating rooms;
• financial;
• investment.

Operating budgets

Operating budgets describe the main activities of the company (budgets for sales, purchases, expenses, movement of fixed assets and intangible assets, taxes). Their composition is determined based on the specifics of the company's activities, its business processes, both basic and auxiliary.

Each process should be reflected in the corresponding functional budget or a separate item. The main business processes are what the company is directly involved in and what makes it profitable (in the case of a trade organization, purchasing, sales and marketing). Auxiliary functions include supporting functions (financial and economic management, personnel management, information technology services, office space maintenance).

Relationship between core and functional budgets

Financial budgets

IN financial budgets disclosed financial activities. They are formed in the event that it is supposed to attract borrowed funds or carry out transactions with short-term financial instruments in order to generate additional income.

Investment budgets

Investment budgets (capital construction, long-term financial investments) are necessary for planning investment activities. For example, if a company intends to expand - the construction of new retail or production space, development branch network, the purchase of shares or shares of other companies.

Example

Let's define a list of operating budgets for a metallurgical plant with a full production cycle. Its main business processes are ore mining, beneficiation, casting, rolling, sale finished products and semi-finished products. Each of these processes must find its cost estimate in the budget.

The following operating budgets are introduced: the budget for ore mining, the budget for ore dressing, the budget for casting, the budget for rolling, and the budget for sales of finished products. These are not all operating budgets, because there are also auxiliary business processes. Among them are personnel management (hiring, training), administrative and economic management (maintenance of office premises, provision of stationery and office furniture), transport support, repair of machinery and equipment, dispatch control, IT support, logistics. Therefore, the group of operational plans will need to be supplemented with forms of budgets for labor costs, personnel management, administrative and maintenance costs, transportation costs, repair costs for machinery and equipment, an IT budget, and a procurement budget for other material and technical resources.

After the composition of functional budgets is determined, it is necessary to develop for them budget forms, determine the composition of indicators, the principle and procedure for their formation. You should immediately make sure that functional budgets are formed in a single format (type of budget table, units of measurement and other attributes).

Functional budget is formed on the basis of the operating budgets of the enterprise. The economic activity of an enterprise can be represented as a set of certain functions. IN general view the set of these functions may look like this: sales, purchases, production, storage, transportation, administration (management), financial activities and investment activities.

aim functional budgeting is to determine the need for resources for various areas enterprise activities. The functional budgets reflect the main decisions about the parameters with which the company's business processes should be implemented (production volumes, prices, purchase volumes, etc.).

Sales budget.

The sales budget contains information about a part of economic indicators that characterize the effectiveness of the sales business process. All information on this business process, as a rule, is reflected in two budgets: the sales budget and the commercial expenses budget. The sales budget reflects the expected volume of sales of products, sales prices and possible revenue from the sale of these products.

Business expenses budget.

It contains information about indicators that mainly characterize the effectiveness of the sales business process. Selling expenses reflected in this budget include all costs associated with the sale of products. This is the variable part wages employees of the marketing department, transportation costs associated with the delivery of products to consumers, marketing and advertising costs, etc. The sales budget must ensure that the sales budget is met. These two budgets should be interconnected and any change in one of them should lead to an adjustment in the indicators in the other. The format of the business expenses budget includes the following indicators:

1) the total amount of selling expenses for the enterprise;

2) variable selling expenses (change in proportion to changes in sales revenue and volume products sold);

3) fixed selling expenses;

4) share of commercial expenses in sales proceeds;

5) the share of transportation costs in the proceeds from sales;

6) the share of expenses for the promotion of products in the proceeds;

7) the share of expenses for the maintenance and service of retail outlets in revenue;

8) profitability of commercial assets.

production budget.

All information about the efficiency of the production business process is reflected in two budgets: in the production budget and in the budget for production costs.

The production budget contains information on production volumes in physical terms in the context of the range of products manufactured by the enterprise, as well as information on the degree of use of the enterprise's production capacity. The production budget is the source document for the operational management of production processes. The production budget format includes the following indicators:

1) the volume of production by types of products;

2) the percentage of capacity utilization;

3) equipment utilization rate;

4) the level of work in progress;

5) the level of labor productivity.

It is necessary to pay attention to the fact that part of the indicators of this budget is calculated by product groups, and part of the indicators by production lines. At the same time, products of various product groups can be produced on the same line. Therefore, such an indicator as the percentage of capacity utilization does not duplicate the indicator of equipment utilization. The equipment utilization rate shows how efficiently the production lines are used in accordance with the production plan. And if the percentage of capacity utilization is less than the equipment utilization rate, then the company produces a wide range of products, but in small volumes. Cost indicators of the business process of production is reflected in the budget of production costs.

Manufacturing cost budget.

This budget reflects all indicators related to the costs of the enterprise for the release of the volume of products that was planned in the sales budget. At the same time, in addition to direct ones, this budget can also reflect indirect costs enterprises. The format of the budget for production costs can contain the following indicators:

1) the total amount of production costs;

2) variable production costs;

3) fixed production costs;

4) the percentage of performance standards;

5) production cost for each type of product;

6) stocks of finished products;

7) profitability of production assets.

Purchase budget.

It contains information about economic indicators characterizing the supply business process. Depending on the complexity of the organization of this business process, the enterprise selects the structure of the procurement budget. If in a company almost all purchases are made in one structural unit, then one procurement budget is developed, if in several structural units, then a separate procurement budget is developed for each of them. As a rule, in large companies to control supply activities, a separate group of specialists involved in monitoring market prices and controlling the purchasing activities of the enterprise.

Payroll budget.

It contains analytical information on departments related to labor costs and evaluation of the effectiveness of the motivation system operating in the company. The wage budget should provide all information on the company's wages, and should also reflect the system of restrictions on maximum size permanent salary and minimum size variable part of wages. The salary budget format may include the following indicators:

1) the total wage fund;

2) the total variable wage fund;

3) the total permanent wage fund;

4) labor productivity;

5) staff turnover rate;

6) wage fund in the context of structural divisions;

7) wage fund in the context of the main business processes.

Administrative budget.

Administrative expenses are the most difficult expenses to directly relate to a business. It is believed that administrative expenses should not exceed 5% of the company's revenue. Otherwise, they will have a negative impact on the efficiency of the enterprise. As a rule, this budget includes the following indicators:

1) total administrative expenses;

2) the share of administrative expenses in the company's revenue;

3) administrative expenses in the context of the structural divisions of the enterprise.

Terms and abbreviations

Budget	-	indicators of economic activity grouped according to the signs adopted in the organization.
Budgeting (budget management)	-	organization management system by responsibility centers through budgets , allowing to achieve the set goals through the most efficient use of resources.
Organization budget	-	a plan drawn up for a certain period of time in physical and monetary terms and determining the organization's need for the resources necessary to obtain the planned income.
Budget structure	-	hierarchy of operating, functional and final budgets of the organization.
Operating budget	-	business budget separate subdivision organization (center of financial responsibility).
Consolidated budgets	-	the result of the consolidation of functional budgets, reflecting the state of solvency (Cash flow budget), profitability (Budget of income and expenses) and value (Budget according to the balance sheet) of the organization.
Budget item	-	component of the budget for which planning and accounting are carried out business transactions one type.
financial structure	-	a hierarchy of financial responsibility centers interacting with each other through budgets.
Functional budget	-	a budget that describes a specific functional area of ​​the organization's activities (sales, supply, production, etc.).
business transaction	-	the simplest event in the activities of the organization that caused the occurrence of income, costs, expenses, receipts or payments of funds, the formation of balances or the movement of inventory.
Revenue Center (CDC)	-	structural subdivision responsible for the income that it brings to the organization through its activities.
Cost Center (CZ)	-	a structural unit responsible only for the costs incurred.
Investment Center (CI)	-	structural unit that has the right to dispose non-current assets organizations (to make investments and disinvestments) and responsible for the value of ROI (return on investment).
Marginal Income Center (CMD)	-	a structural unit responsible for marginal income (the difference between revenue and direct costs) as part of its activities.
Profit Center (CPU)	-	a structural unit responsible for the amount of profit earned as part of its activities (the difference between revenue and total costs).
Center for Financial Responsibility (CFD)	-	a structural subdivision (or group of subdivisions) that carries out a certain set of business operations that can directly affect the costs and / or income from this activity, and, accordingly, is responsible for these items of expenses and / or income.
Center financial accounting(CFU)	-	a structural unit that keeps records of the indicators of income and / or expenses set for it, but is not responsible for their value.

1. General provisions

1.1. Basic principles

The purpose of budgeting and maintaining budgets is planning and accounting financial results organization's activities.

Depending on the object of management, budgets are divided into budgets of the organization, functional and operational.

From the point of view of the subject of budgeting, the following types of budgets are distinguished:

cost budgets describing the turnover of funds and liabilities;

in-kind value budgets that describe the turnover of assets in kind and value terms.

Budgets consist of articles for which planning and accounting of business transactions of the same type are carried out.

A business transaction is the simplest event in the activities of an organization that caused the occurrence of income, costs, expenses, receipts / payments of funds, the formation of balances or the movement of inventory items.

Income- an increase in capital due to the growth of assets (reduction of liabilities) of the organization, obtained in the process of implementation economic activity for the period (not due to the contributions of the owners). There are three sources of income:

for the main activity - income received in the course of the main activity: the volume of sales of products, goods, services;

on financial activities - income from court loan and other financial transactions;

for other activities - income from the sale of fixed assets, materials, raw materials, as well as from the provision of property for rent.

Expenses- costs of material and financial resources, which the organization bears in the process of carrying out its economic activities to obtain future income. The following cost classification is used to maintain budgets:

the main costs are directly traceable to the source of their occurrence and, accordingly, directly attributable to the cost of production: the cost of materials, technological electricity, the salary of the main production workers;

overhead - costs that do not have a direct connection with the products produced and therefore are not directly attributable to the cost of production. Overhead costs will be attributed to the activities of a particular unit where they have arisen, or to the entire organization, according to a standard established empirically in accordance with the selected cost distribution base.

Profit- excess of income over expenses. Profit is formed by levels as the corresponding groups of expenses are subtracted: gross, operating, before taxes, net, retained. The structure of profit levels is intended for analysis and allows you to determine how one or another group of expenses affects the final result.

The Deputy Director for Economics and Finance has been appointed Commissioner for Budgetary Management.

1.2. Scope of application

This Regulation on the budget structure (hereinafter the Regulation) applies to all divisions of InTekhProekt LLC.

The provision applies to:

internal use in solving problems of management LLC ”InTehProekt”;

providing a documented base for the budget management system;

ensuring the continuity of the functioning of the budget management system and the implementation of its requirements in the course of changing conditions.

1.3. Development, approval and modification

Updating the Regulations, reviewing and issuing a notice of changes is carried out by the Deputy Director for Economics and Finance. The developed Regulation and amendments to it are approved by the Director.

Each employee of LLC ”InTehProekt” can submit their proposals for changing or supplementing sections of the Regulations to the Commissioner for Budgetary Management with justification of the arguments on the proposed issue.

The position is reviewed in the event of changes that may be the result of adjustments in the organization's strategy, production relations, undertaken both to more fully and purposefully meet the internal needs of management and the requirements of the environment.

2. The budget structure of the enterprise

2.1. Consolidated budgets

In accordance with the principles of budget management, the organization sets its development goals, which are expressed in specific financial terms liquidity, profitability and value and reflect the state of the organization to which it will come if it is possible to implement all the decisions planned to achieve the goals. These indicators are reflected in the Consolidated budgets, which include:

Income and Expenditure Budget (BDR);

Cash Flow Budget (CFB).

BDR reflects the formation of the economic results of the organization in the form of profit or loss. The purpose of its compilation is to manage the profitability / profitability of the organization. The structure of the BDR should disclose:

the structure (sources of formation) of the organization's income;

the structure (directions of expenditure) of the organization's expenses;

volumes of income and expenses (total, by groups of items and by individual items);

the difference (i.e. profit or loss) between income and expenses for the period.

The BDR structure assumes a consistent subtraction from the gross financial results (revenue, marginal income) of the relevant expense items.

BDDS reflects the movement of funds (cash flow) by types of funds and directions of their movement. The purpose of its compilation is to manage the solvency (liquidity) of the organization.

From the point of view of the direction of cash flow, there are 2 types of movement:

receipt on the accounts / cash desks of the organization;

payments from the accounts / from the cash desks of the organization.

The structure of the BDDS allows you to plan, take into account and analyze cash flows in sections:

direction of cash flows;

structures of payments and receipts in the directions of their movement;

volumes of payments and receipts (total, by groups of items and by individual items);

intermediate and final results (difference between receipts and payments);

cash balances.

To compile an exhaustive list of functional budgets, the following steps can be recommended:

• identify areas of the company's activities;
• to form a list of functional budgets of three main types: income and expenses, cash flow, natural value;
• check functional budgets for consistency;
• show links between budgets.

Functional areas

We can say that functional areas are the view of managers on the business they manage. And since views on the same subject can be different, the principles for classifying areas of activity are often diametrically opposed, even when it comes to the same enterprise. For example, for manufacturing enterprise, which independently sells its products, options for highlighting functional areas can be as follows:

• management of production, sales, purchases, administrative processes;
• management of fixed assets, circulating inventory values, in cash, personnel, customer relationships, supplier relationships;
• management of core, financial, investment and other activities.

Approaches

The work on determining the areas of activity is expert, there are no strict formalized approaches that determine which classification criterion to choose. The only requirement is convenience and clarity for the top management team that will work with the chosen classification of functional areas.

What you should pay attention to when highlighting areas of activity:

• the composition of the areas of activity should correspond exactly to the business that the company conducts. It sounds like a matter of course, but in practice there are often situations where this is not the case. For example, there was a precedent when exclusively trade Organization singled out such a functional area as "Production", although in fact it did not conduct any production;
• it is worth trying to interpret the processes that the company has in a broad enough way. For example, if we are talking about a consulting firm, then, despite the lack of processes material production, she has an activity that involves spending the fund of working time of her specialists. And this is nothing more than production - a kind of write-off of "raw materials and materials" in the process of manufacturing the final product, even if this final product is a consulting service. In other words, such a functional area as "Production" in a consulting company can be singled out;
• the compiled list of functional areas should cover all the activities of the company. For example, if only areas such as "Sales" and "Production" are defined, then something is most likely forgotten. At least "Purchases" are missed;
• the allocated functional areas should not intersect. For example, if “Production” and “Human Resources” appeared in the list at the same time, then most likely there will be intersections. After all, there are production workers who clearly belong to both “Production” and “Personnel Management”.

Read more and with examples about functional budgets in