In the initial period of operation, the budget is considered as a plan or standard; at the end of the period, management can determine the effectiveness of actions and draw up a specific action plan to improve the company's performance in the future - such an action serves as a means of control. The budget is classified into two main categories: current and financial.
It is necessary
initial data for the calculation (resources, sources of funds, directions of expenditure of funds, accounting data)
Instructions
Step 1
First, you need to forecast sales volumes. Typically, this statement is consistent with all market planning, except for those enterprises that are limited in production capacity and can sell as much as they have manufactured. In this case, we are talking about the availability of production capacity or equipment throughput.
Step 2
Budget production and budget for inventory (they are compiled in parallel (at the same time)). The budget plays an important role in the sphere of production and financial activities, therefore it attracts a lot of attention from the side of management. Since not knowing your stocks, it is impossible to calculate the quantity of the product produced.
Step 3
Determine your business expenses budget and administrative expenses budget. It should be remembered here that commercial expenses are usually semi-variable or even variable in nature, therefore, they must be planned in the same bundle with the implementation. Also, administrative expenses are reflected only in the size of the management staff and tend to office luxury. This means that the costs are purely constant, their budget can be drawn up separately.
Step 4
Create a supply budget (procurement budget). This is a very difficult business, but real and necessary. It will require input data that is taken from the inventory budget and inventory forecast. Sometimes they can be taken from the production budget, which make it possible to calculate how much and what kind of raw materials, materials and components are needed and in what time frame it is necessary to start them. Later, when budgeting the cash flow, information about payments for deliveries is used.
Step 5
Ultimately, the budget flows into the expenditure budget, so plan a direct (piecework) wage that depends on the volume of production. Drawing up such a budget also depends on the availability of a tariff-qualified reference book.
