Organization of financial planning and budgeting. Noi Planning and Budgeting

financial planning, budgeting, and forecasting are areas of management activity that are extremely important for the stable development of an enterprise. How are they organized?

What is the essence of financial planning and forecasting?

Financial planning is the activity of an economically active entity (enterprise, government agency, bank, NPO) associated with the distribution of funds in accordance with its actual needs. Financial planning involves building an algorithm for spending current financial resources, as well as those that are transferred to the disposal of an economically active entity in accordance with analytical calculations (or based on current contracts, appropriations, investments and other reliable sources).

Financial planning has the following main features:

determination of a specific period within which the necessary capital transactions are expected to be carried out;
determination of target items of expenditure and income, as well as the schedule for their implementation;
determination of calculated indicators reflecting the amount of income and expenses (currencies, units of measurement of volume, quantity).

In turn, financial forecasting is an activity of an economically active entity, which is also associated with the distribution of funds in correlation with its needs, however, the corresponding algorithm for spending capital in forecasting is built on the basis of an estimated income that is not supported by reliable sources. This may be, for example, an increase in revenue due to expected currency fluctuations or an increase in exchange prices for a particular product exported by the organization.

The main features of financial forecasting will differ significantly from those noted by us above and characterizing planning due to the fact that the uncertainty in the sources of income does not allow us to determine the target items of expenditure. It is also problematic to build a schedule of income and expenses in this case. However, as in the case of financial planning, forecasting is usually applied in relation to the specific period of the proposed capital transactions, and also allows for the use of calculated indicators.

What is budgeting as a financial planning tool?

In some cases, along with the term "financial planning" in economic theory, as well as in management practice, the concept of financial budgeting is used. This is quite understandable. The fact is that budgeting, in accordance with one of the interpretations of this term, can be legitimately considered as one of the components of financial planning. Its main criterion is the definition and approval by an economically active subject of various items of income and expenses of the enterprise, the definition of the sequence, structure or schedule for their implementation. The corresponding schedule can be formed in the form of a budget or, for example, estimates.

Budgeting can also be understood as a technology or financial planning tool, with the help of which the analysis of calculated and actual financial indicators is carried out. This technology involves work in several directions at once. Namely:

in the field of developing financial plan items;
in the field of their execution;
in the field of control over the execution of items of the financial plan.

This interpretation of the concept of budgeting is used by economists when developing scenarios for collecting, analyzing and interpreting financial information that reflects the dynamics of capital movement in an enterprise, spending and replenishing resources, and statistics on the most expenditure and income items. This information may be requested by owners, investors, banks.

What is the relationship between financial planning and budgeting in an enterprise?

Let's try to summarize how financial planning and budgeting relate to each other.

The main thing to note is that the term "budgeting" has 2 main interpretations:

narrower - when this is understood as a component of financial planning, which is the activity of an economically active entity in drawing up budgets and estimates that reflect income and expenses;
broader - when budgeting is understood as a complex technology or financial planning tool that involves working with information reflecting various business processes.

Depending on the current tasks of financial management, either the first or the second approach to understanding the essence of budgeting can be applied.

Is budgeting an essential component of financial planning?

As a rule, financial planning necessarily includes budgeting, since the determination of target items of income and expenses in the process of the corresponding direction of management activity is one of the main features of financial planning. Moreover, in most cases it is acceptable to consider financial and budgetary planning and forecasting in a single context.

At the same time, in order for the money management algorithm to be complete, financial planning needs to be supplemented with other components. It is most convenient to consider them in correlation with the basic principles of financial planning.

What are the basic principles of financial planning in an organization?

Modern Russian experts identify the following list of key principles:

validity;
consistency;
balance;
transparency.

Let us consider their specifics, as well as the features of the corresponding components of financial planning in more detail.

The principle of reasonableness implies the approval of those expense items that reflect the objective needs of the business, as well as those income items that are supported by legal guarantees or objective calculation data. Those costs that are not needed by the business or are optional within the period corresponding to the financial plan should be excluded or given the status of secondary. In turn, income, the extraction of which is not guaranteed, should also not be considered as an obligatory element of the financial plan.

Following the principle of consistency in financial planning involves the definition of cost items that form a commonality of costs, one way or another interconnected and designed to become a logical element of the company's investment policy. In an effective organization, it is extremely rare that any item of expenditure is not related to others, at least in terms of focusing on solving common business problems.

Financial plans should be built in a balanced way in terms of finding the optimal ratio of the real needs of the company and the resources that it has. Another aspect of balance is the elaboration of scenarios for the emergence of various imbalances in the company's business model, dictated, for example, by external factors.

Financial planning should be transparent for all entities and other stakeholders involved in its formation. Transparency can be expressed in the aspect of having full access to the figures indicated in the income and expense items, to the methods for their determination, interpretations of these methods - so that everyone involved in the financial management of the company understands what determines the structure of a particular financial plan.

Thus, budgeting as a process of compiling income and expense items, as well as one of the most integral elements of financial planning in most cases, is supplemented by a list of methods that:

aimed at identifying the validity of items of income and expenses;
allow assessing the quality of following the principle of consistency in building financial plans;
allow to form balanced financial plans;
allow for transparency in the formation of financial plans.

Let us consider in more detail the specifics of the relevant methods, at the same time comparing them with the specifics of financial forecasting.

Basic methods of financial planning and forecasting

So, above we have identified 4 main groups of methods that should be considered as integral elements of financial planning.

The first group of methods - those that are aimed at identifying the validity of the items of income and expenses of the company - can correspond to:

settlement analytics;
normalization (usually not used in forecasting);
statistics.

With the help of calculation, analytical and statistical tools, an economically active entity determines the key and minor items of income and expenses, and through rationing, it fixes the marginal values of costs for each of the items.

The second group of methods - those designed to ensure adherence to the principle of consistency - include:

economic analysis;
extrapolation;
financial mathematics.

Using economic analysis and financial mathematics, the economic subject examines the current financial plans for balance. Using extrapolation, the financier can improve the criteria for assessing the consistency of plans by using data that reflects the effectiveness of planning in previous periods.

The third group of financial planning methods - those aimed at building balanced financial plans - may include:

balance sheet;
modeling (one of the basic ones in forecasting);
multivariate calculations.

Using the balance calculation method, an economic entity determines the ideal scenarios for the ratio of income and expenses within certain reporting periods - for theoretical level. Modeling and multivariate calculations are designed to bring this theory closer to practice.

The fourth group of financial planning methods - those aimed at ensuring the transparency of building plans - include:

legal expertise of document flow;
expert assessment of the document management infrastructure;
internal corporate communications.

Through legal examination of the sources used in financial planning, the economic entity determines the levels of access to them by certain employees of the company. Using an expert assessment of the document management infrastructure, the financier determines how quickly and efficiently such access can be implemented in terms of labor costs and the expenditure of other significant resources. Intra-corporate communications - communication with subordinates, questionnaires, planning meetings - will allow you to find out how the development of work with documents is going on with the existing infrastructure and access levels in practice.

As a rule, these methods are not used in forecasting, since no practical tasks are set before the employees of the company. Forecasts are used by the financiers themselves.

The main stages of financial planning

Let's look at the stages within which the organization of financial planning in the enterprise is carried out. There is a large number of approaches to their definition. Many modern Russian specialists prefer to adhere to the concept, according to which it is legitimate to distinguish 3 stages:

strategic;
tactical;
operational.

As part of the strategic planning stage, financial plans are formed for the long term, usually for several years. Conceptual bases of work of the enterprise, key purposes, tasks of business are worked out. Budgeting for this stage planning does not perform a very important function: in the sources in which budgets and estimates are fixed, information on income and expenditure items is reflected, as a rule, quite superficially. The main role in the preparation of strategic financial plans usually belongs to the owners and top managers of the company.

Tactical planning, in turn, involves the formation of financial plans for the medium term, most often within a year. The content of individual corporate projects, specific areas of enterprise development are being worked out. The main role in the formation of tactical financial plans, as a rule, is played by middle managers - heads of departments and divisions. However, it may be necessary to coordinate the relevant plans at the level of top managers and owners of the company.

Operational financial planning involves the development of short-term algorithms for managing the company's capital, usually within a quarter. Budgeting at this stage performs the most important function - income and expenditure items within the framework of operational planning are determined as detailed and localized as possible. The main role in operational planning is played by ordinary employees, who in some cases understand the intricacies of local business processes much better than their managers. The role of managers again can be reduced to the approval of the relevant plans.

Intra-company financial planning (at the enterprise on the example of a plant)

Let's consider what a scenario for the practical implementation of planning can be, using the example of a plant.

The first stage of financial planning, if we adhere to the concept that we have discussed above, is strategic. Within its framework, the plant management:

is determined with the sources of investment for the entire period of the plan;
approves the coefficients of dividends that are supposed to be drawn during the relevant period;
approves the target rates of business development (growth, stabilization, curtailment of production, gradual exit of the company from the market), as well as key factors determining this choice.

Since the plant is the economic entity in our example, the following indicators can correspond to the above points:

investments - credit funds within the framework of the state program of import substitution;
average annual dividend ratio - 30%;
business development rates — growth due to the development of new markets in the North-Western Federal District.

You can learn more about the features of calculating dividends in business in the articles:

At the tactical stage, competent employees of the enterprise:

form the necessary documentary base for budgeting at the appropriate level - for example, if a tactical plan is built for a year, then these can be intra-corporate plans for profit and loss, cash flow, balance;
approve the list of financial planning methods involved, build the infrastructure necessary for their implementation;
compose the necessary explanations and instructions for specialists responsible for the implementation of the tactical stage of financial planning.

In turn, within the framework of operational planning, the competent employees of the plant, as we noted above, are especially active in using budgeting methods, since in this case the detailing of business processes is important. Work in this direction is mainly related to the development of various types of documentation. Basically, these are sources used for the purpose of:

planning and accounting of balances, postings, estimates;
planning and accounting for credit obligations, as a rule, industrial enterprises actively borrow funds for the purpose of investing in fixed assets;
planning and accounting for foreign exchange transactions, emissions - the activities of industrial companies are often associated with exports and imports, the issuance of shares.

These documents, therefore, are designed to translate to the level of local economic processes those indicators that are determined at the tactical stage of planning.

Financial planning is the planning of all incomes and directions of spending the funds of an enterprise to ensure its development. Financial planning is carried out by drawing up financial plans of different content and purpose, depending on the tasks and objects of planning.
The value of the financial plan in enterprises is that it:
Contains guidelines in accordance with which the company will act;
Provides an opportunity to determine the viability of the project in a competitive environment;
Serves as an important tool for obtaining financial support from external investors
As a rule, a distinction is made between short-term and long-term planning. The significance of some of the decisions that are made extends over the very long term. This applies, for example, to decisions in areas such as the acquisition of fixed capital elements, personnel policy, and the definition of a product range. Such decisions determine the activities of the enterprise for many years to come and should be reflected in long-term plans (budgets), where the level of detail is usually quite low. Long-term plans should be a kind of framework, the constituent elements of which are short-term plans.
Basically, enterprises use short-term planning and deal with a planning period equal to one year. This is explained by the fact that over a period of such a length, as can be assumed, all the events typical for the life of an enterprise occur, since seasonal fluctuations in the conjuncture are leveled during this period. By time, the annual budget (plan) can be divided into monthly or quarterly budgets (plans).
Budgeting is the process of building and executing the budget of an enterprise based on the budgets of individual departments.
2) Budgeting is the process of planning the movement of resources across the enterprise for a given future period.
3) Budgeting is financial planning in a company
Budgeting is a technology for organizing managerial (management) accounting, which involves the development and use of a budget system for planning and operational management of an organization.
The main stages of budget preparation:
Preparing a sales forecast.
Determining the expected volume of production.
Calculation of production costs and operating costs.
Determination of cash flow and other financial indicators.
Preparation of planned financial reports.
Budgeting is a management tool for the distribution (planning) of resources, characterized in monetary and natural terms, to achieve strategic business goals. Budgeting can also be thought of as a process of analyzing previous decisions (control), through which an enterprise evaluates the feasibility of actually using the enterprise's assets, "the quality and quality of the sources used."
The main complexity of the budget process is determined by the fact that the adoption of managerial decisions is associated with future events and the need for forecasting. The uncertainty of the external environment can be tempting to argue that planning is impossible. However, it is just the opposite: if there is a stable environment, then there is no need for planning. Planning in this case is a simple transfer of actual data to future periods. It is uncertainty that dictates the need, the complexity, but also the importance of planning. Perhaps planning errors are the most costly of all corporate.
Structural budgeting is an integral system that includes all the main issues: from substantiating goals and objectives to monitoring their implementation.
The standard way of organizing budgeting is the breakdown and planning of income, expenses and other indicators of the organization's financial activities by items different levels details.
An important feature is the relationship between various indicators of the financial plan - revenues depend on sales, expenses depend on the planned production volume, etc.

More on the topic Question 71. Financial planning and budgeting in enterprises.:

Chapter 11 TYPES AND METHODS OF FINANCIAL PLANNING AND FORECASTING. BUDGETING AS A NEW MANAGEMENT TECHNOLOGY OF PLANNING AT THE ENTERPRISE
82. Financial planning (FP) at the enterprise, budgeting as a tool for current planning
FINANCIAL PLANNING AND BUDGETING AT THE ENTERPRISE
Topic 18. Financial planning at the enterprise. Budgeting
127. Essence and role of budgeting. Relationship between budgeting and financial planning. Main types of budgets

Budgeting. In economic literature, especially in English, one can come across two closely related concepts: planning (planning) and budgeting (budgeting). It is clear that both of these terms mean the processes of drawing up a plan and a budget, respectively. There is no strict and generally accepted distinction between these concepts. In particular, the approach is quite common, according to which the plan is a broader concept than the budget, since it includes the entire range of actions, ordered in a certain way, aimed at achieving certain goals, and these actions can be described not only with the help of formalized, quantitative assessments, but also by listing a number of informal procedures. A budget is a narrower concept that implies a quantitative presentation of an action plan, and, as a rule, in monetary terms. Thus, here the emphasis is placed, firstly, on the dominant cost component in budgeting and, secondly, on a significantly greater certainty, elaboration and detailing of the budget.

In the most general form, the budget (budget) can be defined as a list (estimate) of forthcoming income and expenses (costs) related to a certain time period in terms of cost estimates; a conditional term in the management accounting system, meaning the procedure for coordinating the inflows and outflows of a certain resource (asset) or changing some indicator (for example, the budget for direct costs of raw materials and materials, the production budget, the budget for variable overhead costs, etc.).

In centralized finance, the budget is used primarily to coordinate the expected (planned) revenues and expenditures of the state, its subjects and local authorities. If the revenue side of the budget exceeds the expenditure side, they speak of a budget surplus; if the opposite takes place - about its deficit; the equality of the revenue and expenditure parts of the budget is characterized as a balanced budget. There are various theories as to which government policy in relation to budgeting and in which economic situation is more preferable.

In decentralized finance, the concept of "budget" also has a certain distribution in its traditional sense as a document that systematizes all income and expenses of a given economic entity related to a certain period. Comparing income and costs, you can display various financial results - both intermediate and final. The budget, as a rule, is drawn up in cost estimates, however, in the practice of management accounting, there are exceptions to this rule. One example of a budget would be a profit and loss statement drawn up in forecast estimates; in other words, the structure of income and costs is used, provided for by the format of the reporting accounting form, but prepared on the basis of expected and (or) planned indicators. In the practice of Western companies, there is also the concept of a budgeted balance sheet, as a balance sheet drawn up at the end of the planning period and reflecting the expected (or planned as a guideline) state of the company's assets, capital and liabilities. The budgeted balance sheet and income statement form the basis of the so-called pro forma financial statements, developed in a large Western company in the process of financial planning of its activities. It is also known to understand the budget as a plan of work of the firm specified with the help of cost indicators; it is understood that the latter is not necessarily developed in terms of cost estimates. In large structured corporations, there may be a system of interconnected budgets, ordered by management levels, responsibility centers, production lines, etc.

In particular, one of the most common approaches to planning the current activities of a large firm is to build the so-called master budget, which is a system of interconnected operating and financial budgets. Operating budgets (these include budgets for sales, production, raw materials, management and commercial expenses, etc.) are related to the planning and execution of current production activities; they are important primarily for line managers; financial budgets (these include budgets of cash, income and expenses, sources of formation and directions of distribution of financial resources) are of relatively great importance for top managers and management of the financial service. A description of budgets is given in [Kovalev, 2007(a)].

Obviously, both planning and budgeting are theoretically carried out with varying degrees of flexibility and variability in the initial parameters and (or) targets; in particular, two options for action are possible: a) the establishment of plan targets, the observance of which must be rigorous; b) establishment of corridors of possible variation of factors (target indicators) with subsequent adjustment of the values of the corresponding indicators.

It is the second option that seems to be preferable for large diversified industries that have reserves of capacity and various options their use depending on the prevailing market conditions. This option is implemented using the

10-1030 flexible budgeting topics. A budget is called flexible if it has the following characteristics: 1) a target indicator is chosen (in principle, it is possible to identify several indicators), to which other significant factors are tied; 2) formal dependencies between the target indicator and the main dependent factors are set; 3) a system of simulation modeling is provided, in which setting different values of the target indicator leads to the formation of multivariate budgets; 4) a feedback system is provided that allows making current adjustments to the total budgets. The volume of production (in physical units) is most often taken as a target indicator; in principle, a situation is possible when individual parameters are tied to different bases (this is necessary, for example, for the distribution of certain types of overhead costs). In addition, a certain basic version of the values of the main parameters is initially set, deviations from which vary during simulation.

Budgeting reflects the routine aspect of planning the company's activities and is implemented in a recurring mode with a given regularity. At the same time, in any company, from time to time there is a need to review the existing structure of production and choose a new direction for the development of the company. Its justification is carried out as part of business planning.

Business planning. Any development strategy is enough big company involves a constant search for ways to improve its activities. This refers to the expansion of production volumes, increasing the efficiency of existing industries, the introduction of new technological lines, diversification of activities, entering new markets, etc. In other words, not only dynamic development, but also banal survival in a tough competitive environment are based on the following obvious thesis: even in an existing, well-established production, it is necessary from time to time to introduce elements of innovation, novelty , routine additionality. As a rule, the totality of all actions to justify, develop, implement, implement and monitor innovations is clearly identified, formalized in some way and generally defined as business design. The key element in justifying the feasibility of the next business project is the procedure for drawing up a business plan.

A business plan is a document that reflects in a concentrated form the key indicators that justify the feasibility of a certain project, clearly and clearly revealing the essence of the proposed new direction of the company's activity or the improvement being introduced. The process of writing a business plan is quite complex and requires the efforts of various departments of the company or the involvement of a third-party project organization. Financial indicators make up only a small, albeit very significant part of it. All of them, in fact, are presented in two forms: a profit and loss statement and a cash flow statement, compiled according to forecast data. The degree of detail of the data required in this case (for example, the nomenclature of items of production and distribution costs) is determined by the complexity of the project, the degree of confidentiality, the circle of people for whom the business plan is being drawn up, etc.

A strictly regulated structure of a business plan, of course, does not exist. It depends on the purpose of the business plan, the characteristics of the enterprise, products and other factors. The business plan should sufficiently clearly and convincingly highlight the following issues regarding the proposed business: a) the essence of the business (project); b) material, technical, resource and technological support; c) marketing activities; d) organization of the case, including its staffing; e) the degree of reliability and measures to improve it; f) financial support. One of the possible options for structuring a business plan might look like this:

Title page

Introductory part.

Features and status of the selected business area.

The essence of the proposed business (project).

Expected market quota and justification for its value.

4. Enterprise budget and budget development process

4.1. Enterprise budget structure

Budgeting is the process of planning the future activities of an enterprise, the results of which are documented by a system of budgets.

Typically, the creation of budgets is carried out as part of operational planning. Based on the strategic goals of the company, the budgets solve the problems of distribution of economic resources at the disposal of the organization. The development of budgets gives quantitative certainty to the chosen prospects for the existence of the company.

The main tasks of budgeting include the following:

ensuring ongoing planning;
ensuring coordination, cooperation and communication of business units;
justification of the costs of the enterprise;
creation of a base for evaluation and control of enterprise plans;
compliance with the requirements of laws and contracts.

The benefits of good budgeting and monitoring will more than outweigh the costs of implementing and developing them. Of course, a lot depends on the specifics of the enterprise, but even small firms the use of budgeting is recommended (for example, in an abbreviated version).

The introduction of budgeting in an enterprise faces two groups of problems: methodological and organizational problems. The author's experience proves that, as a rule, the most difficult in budgeting is the stage of its implementation in the enterprise. Privatized enterprises have inherited vast experience in compiling documents that are unnecessary for an enterprise in a market economy. Therefore, the decision of top management to implement budgeting in a new real scale of values is of fundamental importance. And from this moment, in essence, serious work begins, the main stages of which are as follows:

study of internal and external documentation of the enterprise, its structure and interaction of departments, management accounting mechanisms, etc.;
search for the least painful ways to involve the management team of the enterprise in the budgeting process;
development of a budgeting implementation plan (all further actions will be determined by the implementation plan);
revision of old or development of new internal standards;
creation of an information base for budgeting, which provides for the development of new reports for departments that are close to the specifics of the enterprise;
creation of new or reorganization of old units to carry out the budgeting process;
development or acquisition of software and its installation on the internal network of the enterprise;
training.

The time-consuming process of implementing a budgeting system can take months or even years. In addition to time costs, it requires highly qualified specialists in the field of budgeting and computer technology. As a rule, Ukrainian enterprises are unable to carry out these works on their own; engaging a consulting firm is cheaper and much more reliable.

Now let's move on to the budgeting process as such.

Budgets are prepared both for structural divisions and for the company as a whole. The budgets of departments are reduced to a single budget of the enterprise called the main or head. American financial managers say Master Budget.

From the point of view of the sequence of preparation of documents for the preparation of the main budget, there are two components of budgeting, each of which is a complete planning stage:

Preparation of the operating budget;
Financial budget preparation.

The list of operating budgets, as a rule, is limited to the following list:

sales budget;
production budget;
inventory budget;
budget for direct costs of materials;
production overhead budget;
budget for direct labor costs;
business expenses budget;
budget for management expenses;
forecast income statement.

Financial budgets include

investment budget;
cash budget;
forecast balance.

It is convenient to present the sequence of formation of the main budget in the form of a flowchart (Fig. 3). This flowchart does not represent all possible relationships between budgets, but it does describe the logical sequence of the budgeting process.

Rice. 3. Block diagram of the formation of the main budget

Before proceeding to the study of the methodology for preparing the main budget, we will consider some aspects of the philosophy of budgeting:

Budgets can be unattainable if the marketing and production targets set are unachievable.
Budgets may be unacceptable if the conditions for achieving the goals are unfavorable for the enterprise.
The effectiveness of the adopted budgets is evaluated in the process of diagnosing the state of the enterprise.
When drawing up budgets, one should rely on documents that are close in form and structure to accounting documents.
Perform budgeting without the use of computing tools (local computer network) and related software impossible in real time and values.

A few words about the temporary nature of the budget. It is traditional to divide the year into 12 months and draw up all budget tables for each month separately. It must be realized that in this case the whole month is represented by one point in time. Often this does not suit the financial manager, and he strives to produce further more detailed budgeting, breaking down the month into weeks or decades. Such a case can be considered ideal. the main problem its practical implementation is the operational provision of the budgeting process with initial data. The practical truth here is very simple: programming the planning process is only part of the task. It is much more difficult to provide information support for this process in real time.

In what follows, we successively give brief description to each of the private budgets in the overall system of the budgeting process.

4.2. Characteristics of the private budgets of the enterprise

The budgeting process begins with the preparation of a sales budget.

Sales budget - an operating budget containing information about the planned sales volume, price and expected income from the sale of each type of product. The role of this budget is so great that it leads to the need to create a separate division with its own infrastructure, which is constantly and efficiently engaged in market research, product portfolio analysis, etc. As a rule, this is the marketing department. The quality of sales budgeting directly affects the budgeting process and the successful operation of the company.

When preparing a sales budget, you need to answer the following questions:

what products to produce;
in what volumes it will be implemented (with a breakdown into certain periods of time);
how to set the price of products;
what percentage of sales will be paid in the current month, what percentage in the next, whether it is worth planning for bad debt.

In general, the company in the current period already produces several types of products. In accordance with the strategic plan of the company, the marketing department evaluates the business portfolio and makes forecasts regarding the viability and sales volumes of a particular type of product.

The following factors affect the volume of sales of products:

macroeconomic indicators of the current and prospective state of the country (average wage level, production growth rate by industry, unemployment rate, etc.);
long-term sales trends for various products;
pricing policy, product quality, service;
competition;
seasonal fluctuations;
sales volume of previous periods;
production capacity of the enterprise;
relative profitability of products;
the scale of the advertising campaign.

Questions about the strategies and tactics of setting prices for products are widely covered in the literature. The choice of the most acceptable of the possible options is carried out on the basis of an analysis of the market, goals and the state of the company.

Turning to the issue of payment for sold products, we note that all products sold to customers can be paid for by the following types of payments: prepayment, payment upon receipt of products and sale of goods on credit, i.e. with deferred payment. The best option for predicting the nature of payment for products is the cumulative work on statistical analysis of the company's experience, sorting all existing contracts on the basis of the term for paying for products, assessing the degree of fulfillment by buyers of their obligations and issuing the result in the following form (Table 16).

Tab. 16. Coefficients of relative payment for products

In general, the following requirements are imposed on the sales budget:

the budget should reflect at least the monthly or quarterly sales volume in natural and cost terms;
the budget is drawn up taking into account the demand for products, the geography of sales, categories of buyers, seasonal factors;
the budget includes the expected cash flow from sales, which will later be included in the income side of the cash flow budget;
in the process of forecasting cash flows from sales, it is necessary to take into account the collection coefficients, which show what part of the product is paid for in the month of shipment, in the next month, bad debt (as shown in Table 16).

At the same time as the sales budget, it is advisable to draw up a budget for selling expenses, although it is closer to the income statement in the flowchart for compiling the main budget. First, the sales budget is directly related to the sales budget; secondly, commercial expenses are planned by the same divisions.

In order for the marketing department to do a good job of budgeting sales and commercial expenses, it is necessary to consider the following:

calculation of selling expenses should be correlated with sales volume;
do not expect to increase sales while planning to reduce funding for sales promotion activities;
most marketing costs are planned as a percentage of sales volume - the value of this ratio depends on the stage of the product life cycle;
business expenses can be grouped according to many criteria depending on market segmentation;
a significant part of the marketing costs are the costs of promoting the product - this determines the priorities in the management of commercial expenses;
the budget of selling expenses includes the costs of storage, insurance and warehousing of products.

The production budget is a production program that determines the planned range and volume of production in the budget period (in physical terms).

It is based on the sales budget, takes into account production capacity, increase or decrease in inventory, as well as the amount of external purchases. To calculate the volume of goods to be produced, the following universal formula is used:

TMC of finished products at the beginning of the period + Planned production volume =

Planned sales volume + TMC of finished products at the end of the period.

The required volume of output is thus determined as the planned sales volume plus the desired stock of products at the end of the period minus the stocks of finished products at the beginning of the period. The difficult point is to determine the optimal stock of products at the end of the period. On the one hand, a large stock of products will help to respond to unexpected surges in demand and interruptions in the supply of raw materials, on the other hand, money invested in stocks does not generate income.

As a rule, the stock of finished goods at the end of the period is expressed as a percentage of the sales of the next period. This value should take into account the error in the forecast of sales volume and the history of relationships with customers.

Simultaneously with the production budget, it is necessary to draw up production budget stocks. It should reflect the planned levels of stocks of raw materials, materials and finished products. The budget is prepared in terms of value and is intended to quantify the concerns of the enterprise's suppliers regarding interruptions in the supply of raw materials, inaccuracies in sales forecasts, etc. Information from the inventory budget is also used in the preparation of the forecast balance sheet and income statement.

The direct materials budget is a quantitative expression of plans for the company's direct costs for the use and purchase of key raw materials and materials. The compilation mechanism is widely used by Ukrainian enterprises, but the compilation quality leaves much to be desired (overestimation of expenditure coefficients, etc.).

The compilation methodology is based on the following:

all costs are divided into direct and indirect;
direct costs for raw materials and materials - the costs of raw materials and materials from which the final product is made;
the budget for direct materials costs is based on the production budget and the sales budget;
the volume of purchases of raw materials and materials is calculated as the volume of use plus stocks at the end of the period and minus stocks at the beginning of the period;
the budget of direct costs for materials is compiled taking into account the timing and procedure for repayment of payables for materials.

In addition to the budget for the direct cost of materials, a payment schedule for purchased materials is drawn up.

The direct labor budget is a quantitative expression of plans for the company's costs for the wages of key production personnel.

When preparing a budget for direct labor costs, take into account:

it is compiled on the basis of the production budget, data on labor productivity and wage rates for the main production personnel;
in the budget of direct labor costs, a fixed and piecework part of the remuneration is allocated.

If the enterprise has accumulated wage arrears or the enterprise suspects that it will not be able to pay wages on time, then in addition to the budget for direct labor costs, a schedule for repayment of wage arrears is drawn up. This schedule is drawn up according to the same principle as the payment schedule for purchased raw materials and materials.

The production overhead budget is a quantitative expression of plans for all company costs associated with the production of products, excluding direct costs for materials and labor.

Manufacturing overheads include fixed and variable parts. The fixed part (depreciation, current repairs, etc.) is planned depending on the real needs of production, while the variable part uses a standard-based approach. The norm is understood as the sum of expenses per unit of the base indicator. Various basic indicators are used to evaluate cost standards. The standards are calculated on the basis of data from previous periods with possible adjustments for inflation and some market factors.

The budget for management expenses is a planning document that shows the costs of activities that are not directly related to the production and marketing of products.

Management expenses include the costs of maintaining the personnel department, the automated control system, health and safety department, heating and lighting of non-industrial premises, communication services, taxes, interest on loans received, etc. Most of the administrative expenses are of a fixed nature, the variable part is planned with the help of a standard, in which the role of the base indicator, as a rule, is played by the volume of goods sold (in physical or monetary terms).

Having compiled the preliminary budgets described above, you can proceed to the formation of the main financial budget, which begins with the formation of a forecasted income statement for the company.

A pro forma profit and loss statement is a form of financial reporting prepared before the beginning of the planning period, which reflects the results of planned activities. A pro forma income statement is prepared in order to determine and account for the payment of income tax in cash outflows in the cash budget.

The pro forma profit and loss statement is prepared on the basis of data contained in sales budgets, cost of goods sold and operating expenses. At the same time, information on other profits, other expenses and the amount of income tax is added.

The most critical step here is the cost estimate. In order to make the cost estimation process adequate to the process of operational financial planning, it is necessary to build a cost model that automatically recalculates the cost depending on changes in resource consumption factors and prices. The entire set of resources consumed by the enterprise is presented in the form of a standard set, which can be expanded depending on the plans for the development of new types of products by the enterprise. For each type of resource, a consumption coefficient is set cik, which determines the consumption i-th resource k-th product. In addition, the price of each i-th resource pi. The costing model can be visualized in the form of the following two tables.

Tab. 17. Model for estimating the cost in the form of expense ratios

With the help presented in table. 17 and 18 data, the cost is calculated using the following simple formula:

The planned income statement contains in a concise form the forecast of all the profitable operations of the enterprise and thus allows managers to trace the impact of individual estimates on the annual profit estimate. If the estimated net income is unusually low compared to sales or equity, additional analysis of all components of the estimate and its revision are necessary.

The next step, one of the most important and difficult steps in budgeting, is budgeting for cash.

A cash budget is a planning document that reflects future payments and cash receipts. The income is classified according to the source of receipt of funds, and the expense - according to the directions of use. The expected cash balance at the end of the period is compared with the minimum amount of cash that must be constantly maintained (the size of the minimum amount is determined by the managers of the enterprise). The difference is either an unspent surplus of money or a shortage of cash.

The minimum cash amount is a kind of buffer, which allows you to save the situation in case of errors in cash management and in case of unforeseen circumstances. This minimum amount of cash is not fixed. As a rule, it will be somewhat larger during periods of high business activity than during recessions. In addition, to improve the efficiency of cash management, a significant part of this amount may be held in deposit accounts.

The cash budget is compiled separately for three types of activities: core, investment and financial. This division is very convenient and visually represents cash flows.

Data on the sales budget, the various production and operating budgets, and the capital budget are reflected in the cash budget. Dividend payments, equity or long-term debt financing plans, and other projects requiring cash expenditures should also be taken into account.

On the final stage budgeting process, a forecast balance is drawn up.

The forecast balance sheet is a form of financial reporting that contains information about the future state of the enterprise at the end of the forecast period.

The forecast balance sheet helps to reveal certain unfavorable financial problems that management did not plan to deal with (for example, a decrease in the company's liquidity). Forecast balance allows you to perform calculations of various financial indicators. Finally, the forecast balance serves as a control for all other budgets for the upcoming period - indeed, if all budgets are methodically correct, the balance should “converge”, i.e. the sum of assets should be equal to the sum of liabilities of the enterprise and its own capital.