The purpose of budget management, the main purpose of budget management

1.Budgeting helps managers to determine feasible goals by planning specific actions, and at the same time allows managers to consider various possible scenarios;

2.To promote cooperation and communication, the general budget can coordinate the activities of the organization, so that the manager can consider the interconnection between the entire value chain in a comprehensive manner, and the budget is an effective means of communication that can reach all corners of the enterprise;

3.It is helpful to evaluate performance, through the organization and implementation of budget management objectives, it can promote the realization of the objectives of the enterprise, ensure the continuous improvement and optimization of the objectives of the enterprise, and is a good management model that reflects the performance of the enterprise;

4.Motivate employees, the process of budgeting will promote managers and all employees to face the future, promote development, help enhance foresight, avoid blind behavior, and motivate employees to achieve the goals of the enterprise.

In order to concretize the objectives through budget formulation, it is necessary to further decompose and implement the various budget indicators to the responsible departments or responsible persons. Budgeting provides standards for controlling actual actions; The purpose of control is to achieve the desired goal. In order to carry out effective control, the main attention is paid to the control that is critical to the effectiveness of the work.

For example, in order to achieve the budget profit target, the key points of control are sales revenue, material procurement costs and large expense costs. The object of control is not the status quo of things, but the trend of things. For example, for our company, controlling the process of localization of raw materials means reducing procurement costs and improving the ability to adapt in market competition.

from:MBA Think Tank Encyclopedia].

It helps managers to identify achievable goals by planning specific behaviors.

First of all, budget management is an effective means of making plans. Budgeting helps managers determine achievable goals by planning specific actions. In the process of creating a budget, managers must consider various possible scenarios to make the plan more clear and targeted to help the business achieve its goals.

Second, budget management can promote cooperation and exchange. The general budget coordinates the activities of the various departments in the enterprise. Budgeting is an effective means of communication that touches all corners of the business, promotes cooperation and exchange, and ensures coordination between departments.

Thirdly, budget management has a direct impact on performance evaluation. Through the budget management of the enterprise objectives and the organization and implementation, it can promote the realization of the objectives of the enterprise, ensure the continuous improvement and optimization of the objectives of the enterprise, and is a good management model that reflects the performance of the enterprise.

Advantages of budget management

1. Motivate employees

It is precisely because of the above advantages of budget management that it can be widely used in large enterprises and achieve good results. Under the guidance of the strategic objectives of the enterprise, the enterprise budget management is to comprehensively improve the management level and operational efficiency of the enterprise through a series of activities such as budget preparation, implementation, control, evaluation and incentives, and realize the maximum value of the enterprise.

2. It is the quantification of the plan

Budgeting is not a simple projection of income and expenditure or a reflection of the amount of financial and financial resources, but a budget is a kind of resource allocation, a detailed description of the content, quantity, and timing of the planned inputs and outputs. Through the preparation of the budget, the enterprise managers have a clear business goal and a direction for their work.

Budget management is a general term for a series of organizational, regulatory, controlling, and supervising activities carried out by Nian Gao to ensure the standardized operation of state budget funds. The budget in budget management includes the operating budget, capital budget, financial budget, financing budget, etc., also known as the "comprehensive budget". Budget management can be divided into investment budget management and production budget management.

The principles of budget management include the principle of accountability, the principle of management by exception, the principle of effectiveness and the principle of economic efficiency.

Budget management is conducive to optimizing the allocation of resources of the enterprise, all-round mobilization of the enthusiasm of employees at all levels of the enterprise, is the accountant to flexibly apply the internal management of the enterprise to the whole process of budget management, but also to promote the maximum benefit of the solid foundation.

The role and significance of budget management are mainly reflected in the following aspects: 1. The budget has the function of planning, controlling and guiding the orderly progress of enterprise economic activities and achieving the predetermined goals in the most economical and effective way. The enterprise budget enables the business to achieve the desired goals by planning, controlling and directing economic activities.

2. Enterprises can achieve coordination between various departments within the enterprise through budget management.

3. Budget is an important basis for performance appraisal. Through the comparison of budget and reality, the efficiency and performance of the enterprise can be evaluated, and there is a clear standard.