Financial Budget Management Factors Affecting Execution

[Abstract] financial budget management has become an important element management system, but many corporate financial budget management and can not achieve the desired results, financial budget itself unscientific irrational factors and environmental technologies to the effective implementation of financial budget management . enterprises in the overall development strategy should be based on objective analysis of the internal and external environment, using the right technology and methods, establish effective monitoring, analysis, evaluation mechanisms, to develop scientific and rational budget management system to ensure its execution, in order to achieve business long-term strategy.


[Keywords:] budget management; objectives; implementation; initiatives; effect

First, the definition and characteristics of financial budget

Ministry of Finance in the "" On the enterprise implementation of financial budget management guidance>> that: "Corporate financial budget forecasting and decision-making is based on strategic goals of enterprises, business acquisition and delivery of a certain period, the income and spending, business Jingyingchengguo allocation of capital campaign and made specifically ����. "On the one hand corporate finance budget is done on the basis of the forecast, so uncertain, both in the scientific analysis of environmental factors, according to business Nei request made by the external environment, must be able to guide the company for a certain period of work, it is also relative stability; the other hand, the budget for the financial services business decisions is to achieve corporate strategic objectives of the control of one phase, it is necessary is a comprehensive, systematic.


Financial budget management as an important part of management accounting theory, business management system is a major component of an enterprise planning, coordination, control, motivation, evaluation of production and business activities and implementing corporate strategy for an integrated policy mechanisms, as well as business-related investment and financing activities and business activities and financial activities of the future and to control the situation is expected to be an effective management tool. scientific and reasonable financial budget management helps the smooth corporate strategic objectives achieved, but to achieve corporate strategic objectives but can not rely on financial budget management system itself, the key is the implementation of financial budget management and execution. a system or policy, no matter how scientific and reasonable, if not implemented or do not place unreasonable and can not achieve the management target.


Second, the impact of the implementation of Financial Budget Management Analysis Force

Status of the financial budget management over the years that many companies and financial budget management can not achieve the desired results, the reason, one is an unreasonable financial budget itself unscientific; the other hand, environmental and technical factors, the objective is not perfect. These were to some extent, affected the corporate financial budget management execution.


(A) unscientific and unreasonable financial budgeting, poor execution

1. Corporate Finance budget out of line with the corporate strategic objectives

Only serve the current financial budget or short-term business goals, immediate attention to enable enterprises to long-term interests, consistent with the company long-term development goals, making the preparation of corporate financial budget of the poor convergence, resulting in large span of budget adjustments, implementation difficulties .


2. The lack of management flexibility in Financial Budget

Method of choice in the budget, most enterprises operating budget, capital expenditure budget and corporate financial budget is still using the traditional fixed-budget method for the preparation of periodic budget, all in the course of budget targets remain the same, end of run When the results were compared directly with the budget targets. This method is suitable for the static budget small fluctuations in the volume of business enterprises. When the enterprise sales, factors such as changes in price and cost is high, showed a static budget targets blindness lag and lack of flexibility, it is difficult to become an effective assessment and evaluation of reference staff.


3. Ignore the cost of capital Financial Budget Management

Enterprises mainly in the operational budget and capital expenditure budget based on the preparation of corporate financial budget, attached great importance to the project cost estimate of capital expenditure and investment arrangements, while ignoring the cost of funds used. This not only makes less efficient use of funds, waste of resources, and the resulting capital structure not reasonable, higher cost of capital, financial risks.


4. Corporate Finance Budget emphasis on internal factors only, ignoring the external environment of

Some enterprises in the process of corporate financial budget management, the main historical indicators and based on past activities, not an objective scientific analysis of the environment, rule of thumb forecasting, ignoring the detailed investigation of the external environment and forecast financial budget targets for many companies is difficult to compatible with the external environment, more difficult to implement in the enterprise. and even some businesses will be reduced to adjust the financial budget management during the index a useful tool.


(B) environmental and technical factors affecting budget execution

1. The implementation of financial budget management organization is not perfect

As China's enterprises do not yet have a truly effective corporate governance structure, corporate decision-making executives in corporate finance in the budget process low level of participation, in addition to whether the need for the majority of business-to-business financial budget management awareness of the issue is not very clear and unity, so the company finance the budget preparation and adjustment of the accounting department or fall on the budget group, resulting in a lack of corporate financial budget management and forward-looking authority, it is difficult to play the role of corporate financial budget control.


2. Hysteresis Financial Budget management

At present, enterprises are still using the traditional method of manufacturing costs and control costs. While cost management and accounting work will be combined cost index can be consistent with accounting standards, while actively improving employee productivity, and increase economies of scale play a role However, in determining the price, control the future costs, still can not play an active role. advanced cost management methods, such as changes in cost, although in theory, Research has matured, but in practice the knowledge of managers, employees the quality of the other reasons have not been widely used.


3. Financial Budget Management lack of effective supervision and evaluation

The financial budget to achieve the desired effect, in addition to the preparation of scientific and rational, but also must have effective measures and means to ensure that, while most companies recognize the importance of managing financial budgets, but only the formation of a number of financial budget management documents, or just some of the financial budget for the preparation of the report, enterprises lack the budget implementation process supervision and control, lack of budget execution results of the examination and incentives, differences in budget execution and financial analysis of the causes is not timely, which are affected to some extent corporate financial budget execution. Links to Research Papers Download http://www.hi138.com Third, strengthening budget execution initiatives

(A) improve and perfect the organization Financial Budget Management

Improve and perfect the corresponding financial budget management organization, responsible for corporate organization and implementation of financial budget management. In order to encourage enterprises to establish a sound internal restraint mechanism, strengthening financial budget management, business must be integrated with appropriate policies and regulations, establishment of budget management organization, such as the Budget Committee or the General Manager of Corporate Finance office will be responsible for corporate financial budget management of specific issues, and improving the decision-making sense of the financial budget management, and corporate representatives to identify the first responsible person, to strengthen the leadership, clear lines of responsibility. Budget management is a preparation of the budget, implementation, control and evaluation and incentive, and budgetary activities integrated into the production and operation activities in the systems engineering, enterprise management and involved in all aspects of production and management, all aspects, and these links are made division of the implementation of different departments and staff, so the need for all employees directly or indirectly involved in the budget management process. decision-makers in the financial budget management should be given great support to the process, between different levels of communication and coordination between departments and employees between rights and responsibilities of each sector in mobilizing the enthusiasm of the financial budget management, in order to achieve full budget management.

(B) The business enterprise development strategies to determine the budget management objectives

To corporate strategic objectives as the basis for enterprise financial budget management, enables enterprises to immediate interests and long-term development of organic integrated to promote sustainable development of enterprises. No strategic sense of the financial budget is the company's short-term behavior, we will lose the right direction can not enhance their market competitiveness. Therefore, the enterprise is in business before the financial budget management should define their strategic objectives, business strategy around the development, implementation, control, a series of measures taken. compiled on this basis, the period budget, so that enterprises around the convergence of the budget to avoid the blindness of the budget work. enterprises subordinate to the financial budget management of the strategic management of enterprises, rather than simple business tactics and methods of prediction. corporate strategic direction, strategic objectives will be directly determine the choice of budget model to determine where budget priorities and needs of key aspects of security, the decision to determine how the budget target. Only in this way locate the financial budget, that is located in the corporate strategic objectives, budget management in order to have vitality. Therefore, enterprises should implementation of financial budget management, and enterprise must be based on market conditions existing resources to develop enterprise development strategies, define strategic goals, financial budget management to grasp the right goals and direction.


(C) the correct use of procedures and methods for the preparation of financial budgets

The financial budget should be based on long-term business strategy, development plans, to consider future policies, regulations, economic and natural factors, from the bottom to collect the preparation of corporate finance general budget summary, Budget Committee examined and approved by the enterprise as a business after the official budget. But The overall implementation of the program must be decomposed to the internal units, which is in the Financial Budget Management one of the key links. enterprises in the strategic positioning and goals of good analysis, should be combined with the actual situation, define the financial budgeting should take procedures and methods. financial budget preparation process in all business despite the similar, but more scientific approach should be the procedure in accordance with the bottom-up, top down to bottom, grade preparation, step by step summary of procedures for the preparation. specific to the budget at all levels within the enterprise, shall be borne by the budget unit of economic responsibility of business types and permissions, the preparation of different forms of financial budget. in the preparation of the financial budget in order, the enterprise shall first operating budget, capital budget, financing of the budget, after the financial budget processes. while enterprises should actively seek a more scientific and reasonable method to enhance dynamic management. For example: zero-based budget, without the restrictions of existing projects, to mobilize the enthusiasm of managers at all levels, initiative and creativity, the potential of mining to reduce costs and help the company's future development; using probability estimate, the uncertainty of the environment in the budget to improve the reliability and accuracy of estimated values, reduce the risk of budget targets; implement rolling budget, not only to adjust the recent budget, the budget more realistic, but also realizes the interface with the daily management, so that managers always take from the dynamic point of view of a recent long-term planning goals and the strategic layout.


(D) the implementation of strict financial budget, analysis and evaluation

First, the budget execution process is the budget for key budget budget. Has been established, within the enterprise has "the force of law." Budget is completed, companies of the sector is not only defined the department's mandate, but also clearly see the entire enterprise the work of the objectives and activities in this sector to the overall objectives. Therefore, all departments must strictly implement the budget, establish enterprise-wide "budget concept." only strictly and earnestly implement the budget, so that each occurrence of a business with the corresponding link budget in order to truly achieve the budget management control. Second, to sum up the analysis of budget implementation. each budget period, through the financial accounts statements and budget statements contrast, the preparation of a detailed budget and final account analysis to identify the actual deviation indicators and budget targets, analyze the reasons for differences in the formation of: a budgetary bias, the timely adjustment of budget targets; is the implementation of the deviation, to the crux of the correct analysis, summarized in the process of production and management problems and contradictions to business continuity management or change management strategy to provide true, and to do a good job for the next incentive based on the assessment work. Again, strict examination, to establish "the work of assessment and incentive is the lifeline of the budget" concept, to ensure that the budget management in place. no assessment, the budget can not perform the work, budget management has become meaningless. rigorous assessment is not only indicators of value for the budget and budget to compare the actual performance results, affirming our achievements, identify problems, analyze the causes and improve the future work, but also In order to implement a fair reward for employees to mobilize the enthusiasm of the staff, to ensure that the final realization of corporate strategic objectives. is to protect the budget target cash incentive to complete an important part of cash rewards and punishments can only guarantee the seriousness of the budget to ensure that management of all aspects of the convergence process . at the time the choice of budgetary control, the majority of our business to business financial budget to implement the results of control. In this control, the actual bias has been formed, the loss has been produced, in addition to adjust the budget for next year's corporate finance no other way. If control and control of the selection process combines the results, then not only can control the effect of achieving results, and process control, especially through the establishment of corporate financial budget reporting system, both to adjust the budget implementation process deviations, but also ensure the smooth implementation of the budget .


[References]

[1] Yu Xu Ying. Management Accounting [M]. Beijing: China Renmin University Press, 2005.

[2] Republic of China Ministry of Finance. Corporate Finance General [M]. Beijing: China Financial Publishing House, 2006.

[3] Ministry of Finance, Securities and Futures Commission, the Audit Commission, China Banking Regulatory Commission, China Insurance Regulatory Commission to develop. Basic norms of internal control [M] .2008. Links http://www.hi138.com Research Papers Download