One of the main aspects of the successful operation of the enterprise is a well-designed budget, which means the annual financial plan of the organization. In this plan, a projected profit and loss statement of the enterprise is made, as well as an estimated balance sheet and cash plan.
It is necessary
- -operating budgets based on last year's performance;
- - plan of expenses, income;
- - cash flow and forecast balance.
Instructions
Step 1
The budget is necessary for planning and monitoring the development and activities of the enterprise. At the initial stage of action, it is a plan, and at the end of the year, a means of control by which management determines performance.
Step 2
It is conventionally divided into two categories: current and financial. In the current one, you need to reflect the sales plan (it is considered the main point for preparing the budget), the production plan, the estimate of direct costs for materials, labor costs, estimates of general plant overhead costs and sales and administrative costs. This budget should also include a projected profit and loss statement for the enterprise. In financial, a cash plan and a projected balance sheet are developed.
Step 3
When preparing it, you need to have a sales forecast, expected production volume, calculations of production costs and operating costs, cash flow. There are two main approaches to budgeting - incremental and non-incremental.
Step 4
In the first case, the indicators of the last year are taken as a basis and are increased by the inflation index of the current reporting period. In the second, forecast rates, data from signed contracts and marketing research are used.
Step 5
At the last stage of preparation, the management should receive three main forms: budget of expenses and income, forecast balance and cash flows.
Step 6
Often, many businesses are limited only by the budget of income and expenses. However, for better planning, it is desirable to have all three forms. These forms are filled out based on operating budgets (production, sales, etc.). It is approved by the head and chief accountant of the enterprise.
