Budgeting & Enterprise Strategy

At present, many production companies use the Techpromfinplan in their activities, which is compiled on the basis of data on the volume of production of finished products for the current year, the volume of costs for production and other indicators. This production and financial plan of the enterprise is the most important component of its activity and provides the managers of the enterprise with all the necessary information, which allows to judge the correctness of a management decision, and to develop measures for prompt correction of activities.

The process of development of the Technopromfinplan is directly connected with the budget planning of the enterprise. Budgeting contributes in turn to reducing the inefficient use of enterprise funds due to the operational planning of business operations and monitoring their actual implementation.

Usually the word "budget" is associated with the preparation of budgetary policy throughout the state, and not at the micro level - on the scale of one enterprise. The budget is the quantitative expression of centrally established indicators of the enterprise plan for a certain period of time:

-use of capital, commodity-material, financial resources;

- attraction of sources of financing of current and investment activity;

- income and expenses;

- cash flow;

-investments (capital and financial investments)

Budgets are developed for the enterprise as a whole and for individual structural divisions with the aim of forecasting financial results, setting target technical and economic indicators, limits of the most important expenditures, justifying the financial viability of the types of production and economic activities that the enterprise is engaged in.

When developing the process of budgeting at an enterprise, it is important not only to understand the general purpose of financial and production planning, but also what tasks in the conditions of a particular enterprise or firm will ensure budgeting. First of all, we are talking about tasks that correspond to the main goals of the company.

The company's budget is a kind of tomograph that highlights all the activities of the enterprise. At each stage of enterprise development the enterprise has specific tasks and functions, for implementation of which a methodical and consistent action plan is needed. Moreover, in the development of such a plan, not only specialists of the company's management services, but also all employees of the enterprise should participate. After all, ultimately, the implementation of the enterprise's action plan, the implementation of the company's budget depends on the harmonious and harmonious work of the entire team of the enterprise. The enterprise is a kind of mini-state, and here, as in the state, everyone should have a clear idea of the main objectives of the enterprise's activities, the need to implement a particular enterprise policy. When the participants (workers) of the enterprise are isolated from the management of the enterprise, this ultimately leads to a decrease in the results of the production activity of the enterprise

With regard to the process of enterprise budgeting, this can be expressed not only in the control over the execution of the budget, but as applied to the stage of budgeting, everyone can make suggestions on improving the use of financial and productive resources.

The company, according to the theory of Michael Porter, can choose three versions of the basic strategy for the successful operation of the company:

1. Absolute leadership in costs
2. Differentiation
3. Focusing

What are the advantages for the budgeting process can give a choice of a particular strategy. According to the strategy of absolute leadership in costs, it is planned to tightly control the costs of production and reduce the unit cost of production to a level lower than that of competitors. In addition, it is also expected to accelerate the turnover of the company's current assets. After all, even a small change in the turnover ratio can free up sufficiently large amounts of cash. "Released" money can be spent on additional investments in production, or used for other purposes of the enterprise. With regard to the budgeting process, this strategy involves the development of clear and detailed plans for the use of material costs for each day of operation of the enterprise. Each employee of the enterprise should clearly realize that at this particular moment the production result of the activity is important and that the introduction and development of new ways of conducting activities that allow for more efficient use of material costs are necessary.

The strategy of differentiation presupposes the creation of such products, which will be unique or high-tech. Moreover, differentiation can be carried out in different forms: technological, functional, customer service and others. This strategy in the case of its successful implementation is an excellent tool to increase the profit of the enterprise. In addition, this strategy allows the company to take a more favorable position in relation to substitutes than its competitors.

The strategy of focusing involves focusing on a certain group of customers, the type of products or the geographical segment of the market. This strategy should be applied in practice in combination with the first two.

Thus, the process of developing the production and financial plans of the enterprise consists not only in collecting and statistical accounting of information on planned production volumes, forthcoming costs, cash flow and accounting and tax accounting data, but also in developing an enterprise strategy and participation in the development process And the implementation of these plans of all employees of the enterprise.