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Functional budget is formed on the basis of the operating budgets of the enterprise. The economic activity of an enterprise can be represented as a set of certain functions. In general, the set of these functions may look like this: sales, purchasing, production, storage, transportation, administration (management), financial activities and investment activities.

Purpose Drawing up functional budgets is to determine the resource needs for various areas of the enterprise. Functional budgets reflect the main decisions about the parameters with which the company’s business processes should be implemented (production volumes, prices, purchase volumes, etc.).

Sales budget.

The sales budget contains information about part of the economic indicators that characterize the effectiveness of the sales business process. All information on this business process, as a rule, is reflected in two budgets: the sales budget and the business expenses budget. The sales budget reflects the estimated volume of product sales, sales prices and possible revenue from the sale of these products.

Business expenses budget.

It contains information on indicators that mainly characterize the effectiveness of the sales business process. Selling expenses reflected in this budget include all costs associated with the sale of products. This includes the variable part of the salaries of marketing department employees, transportation costs associated with delivering products to consumers, marketing costs, advertising, etc. The business expenses budget must ensure that the sales budget is met. These two budgets must be interconnected and any change in one of them must lead to adjustments in the indicators in the other. The business expenses budget format includes the following indicators:

1) the total amount of commercial expenses for the enterprise;

2) variable selling expenses (change in proportion to changes in sales revenue and volume of products sold);

3) fixed business expenses;

4) the share of commercial expenses in sales revenue;

5) the share of transportation costs in sales revenue;

6) the share of expenses for product promotion in revenue;

7) the share of expenses for maintaining and servicing retail outlets in revenue;

8) profitability of commercial assets.

Production budget.

All information about the efficiency of the production business process is reflected in two budgets: the production budget and the production expenses budget.

The production budget contains information on production volumes in physical terms in terms of the range of products produced by the enterprise, as well as information on the degree of use of the enterprise's production capacity. The production budget is the source document for the operational management of production processes. The production budget format includes the following indicators:

1) production volume by type of product;

2) percentage of production capacity utilization;

3) equipment utilization rate;

4) level of work in progress;

5) level of labor productivity.

It is necessary to pay attention to the fact that part of the indicators of this budget is calculated by product groups, and part of the indicators by production lines. At the same time, products from various product groups can be produced on one line. Therefore, such an indicator as the percentage of production capacity utilization does not duplicate the indicator of equipment utilization rate. Equipment utilization rate shows how efficiently production lines are used according to production plan. And if the percentage of production capacity utilization is less than the equipment utilization rate, it means that the company produces a wide range of products, but in small volumes. The cost indicators of the production business process are reflected in the budget of production costs.

Budget for production costs.

This budget reflects all indicators associated with the company’s costs for producing the volume of products that was planned in the sales budget. At the same time, this budget may also reflect indirect expenses of the enterprise in addition to direct ones. The production cost budget format may contain the following indicators:

1) the total amount of production costs;

2) variable production costs;

3) fixed production costs;

4) percentage of compliance with production standards;

5) production cost for each type of product;

6) finished product inventories;

7) profitability of production assets.

Procurement budget.

It contains information about economic indicators characterizing the supply business process. Depending on the complexity of organizing a given business process at an enterprise, the structure of the procurement budget is also selected. If a company deals with almost all purchases in one structural unit, then one procurement budget is developed, if in several structural units, then for each of them its own procurement budget is developed. As a rule, in large companies, to control supply activities, a separate group of specialists is created to monitor market prices and control the purchasing activities of the enterprise.

Payroll budget.

It contains analytical information on departments regarding labor costs and assessing the effectiveness of the motivation system operating in the company. The wage budget must provide all information on the company’s wages, and must also reflect a system of restrictions on the maximum amount of permanent wages and the minimum amount of the variable part of wages. The salary budget format may include the following indicators:

1) total wage fund;

2) total variable wage fund;

3) total permanent wage fund;

4) labor productivity;

5) staff turnover rate;

6) wage fund by structural divisions;

7) wage fund in the context of main business processes.

Administrative expenses budget.

Administrative expenses are the most difficult expenses to link directly to the business. It is believed that administrative expenses should not exceed 5% of the company's revenue. Otherwise, they will have a negative impact on the efficiency of the enterprise. Typically, this budget includes the following indicators:

1) total administrative expenses;

2) the share of administrative expenses in the company’s revenue;

3) administrative expenses by structural divisions of the enterprise.

Budgeting is becoming a very popular management technology in Russia: more and more enterprises would like to systematically describe their financial future. The main tool for such a description is the budget (more precisely, budgets) of the enterprise, and the purpose of this article is to talk about new approaches to creating budgets developed by Intalev specialists. To begin with, let’s define the basic concept that we will constantly use - “budget”:

Budget- this is a plan drawn up for the next period in physical and monetary terms, and determining the enterprise’s need for resources necessary to achieve the enterprise’s goals in the corresponding period.

Let us introduce another important definition:

Functional budget– a budget that describes a certain aspect of the enterprise’s activities (functional area).

We will not now go deeply into what an “area of ​​activity” is, since the identification of functional areas is a separate management art. To solve our problems, let’s simply state that any company has these areas, and functional budgets are needed to manage them. We also note that according to the Intalev methodology, the construction of functional budgets is the essence of the work to create a budget model of the company.

From a practical point of view, it is important to decide on what principle the budget system will be created at a particular enterprise. Most of the approaches described in textbooks and used in practice by many Russian enterprises are patchy, i.e. budgets are allocated based on the most “bright” functional areas: sales, purchasing, production - but do not carry a comprehensive description of the company. As a result, many divisions, most often service and infrastructure, are left without levers to manage the financial component of their activities.

Here is a typical example of a “patchwork” budget scheme:

It would seem that the above diagram reflects everything necessary for management: here there are “setting” budgets, from which all further calculations are made (Sales Budget), and main production budgets, and even consolidated BDR, BDDS and Balance. Indeed, in the early days of popularizing budgeting in Russia, such a scheme was more than enough. The advantages of such a structure were the visibility of the emphasis in financial management.

But it is also obvious that this scheme contains certain shortcomings:

• there is no clear division of budgets by type of indicators: natural and cost, as a result of which, for example, it is not obvious how costs in the form of raw materials and materials written off for production are transferred to expenses when selling products;
• balances are poorly recorded, both of inventory and cash, which is why, for example, the BDDS appears “out of thin air”;
• there is no information on the formation of non-current assets and liabilities of the company;
• functional and final, consolidated budgets are mixed without describing the algorithm as private budgets of various functional services form the final budgets of the entire enterprise.

This scheme concentrates on managing the current assets of the enterprise, leaving out complex production processes distributed over time, the movement of capital and liabilities, and the formation of long-term property. We can say that it would be suitable for a small company with a fairly simple operating technology, operating at its own expense and not conducting active financial and investment activities.

The next step in the development of budgeting methodology was the development of a comprehensive budget model based on the principle that can be conventionally called “from the Profit and Loss Statement (P&L)”. Its essence is that:

All functional budgets are divided into 3 categories: “BDR”, describing the formation of income and expenses, “BDDS”, reflecting receipts and payments of funds, and “In-kind cost”, characterizing the movement and balances of fixed assets, goods, materials, inventories, etc. .d.

The list of budgets of the “BDR” type is created in such a way that the data summed up for all budgets of the “BDR” type: gives the final financial result of the company: profit or loss. For example, Budget of sales income – Budget of expenses for core activities – Budget of other expenses + Budget of other income = Profit.

Symmetrically, the sum of all budgets of the “BDDS” type gives the balance of funds at the end of the period under review, and the sum of natural-cost budgets gives the balance of the company’s property of all types.

An example of budgets built “from the operating budget” is given below. The three gray vertical fields represent the types of budgets: BDR, BDDS or Natural-cost, each block diagram is a separate functional budget, the dotted lines indicate the intermediate consolidation of budgets, and the arrows indicate the sequence of budget formation and their influence on each other. The final data calculated for all three fields forms the company’s Management Balance Sheet.

For a long time, this approach to creating budgets could be called optimal, since, on the one hand, it created a systematic and transparent picture of the financial and economic activities of the enterprise, and on the other, it was simple and understandable both when setting up budgeting and when operating the implemented system.

It can even be argued that for a small or medium-sized enterprise, the budget model “from operational management” is the golden mean between complexity and simplicity. For more than seven years of budgeting practice, Intalev company consultants have successfully applied the described approach at several dozen enterprises in Russia and the CIS, and the result speaks for itself - the developed budget systems have given the managers of these companies a flexible and effective business management tool.

But, like any methodology, the “from the control center” approach naturally has its limitations. In short, it does not fully reflect the process of balancing the indicators of some budgets with the indicators of others. Here are some examples:

There are no explicit accounts receivable or payable. Of course, there is data on debts, but they are calculated as the differences between the corresponding budgets of the BDR and BDDS (income accrued, but not yet received in the form of “real” money, or expenses incurred, but not yet paid), but formally the debt budgets, if any I’d like to highlight it, there’s nowhere to hide.

There are no capital flow budgets, although changes in the ratio of equity and borrowed capital can be tracked using the Budgets of payments and receipts for financial activities (raising and repaying loans, contributions to the authorized capital). The same is true for the financial investments of the company itself.

The VAT calculation procedure is ambiguous. Questions remain open: at what cost to reflect purchased inventories in natural budgets - with or without VAT, and how VAT calculations will affect other tax budgets.

The algorithm for using profits is not described.

Intalev's practice shows that all these issues, although important, are not a reason for allocating separate budgets for small and medium-sized businesses. All necessary calculations can be made as additions to the budget model, as well as corresponding management reports can be generated for all indicators. For example, cards of settlements with counterparties will provide information on the status of receivables and payables.

In our opinion, constructing such budgets as independent management objects would only overload and make the budgeting system ineffective for most enterprises. Such budgets simply would not have “owners”, i.e. real people responsible.

But for very large companies - let's call them “mega-companies” - the situation with “balancing” budgets is somewhat different. What kind of companies are we talking about? First of all, these are financial and industrial groups, natural monopolies, the largest companies in the oil, gas, metallurgical and energy industries. Simplifying the situation somewhat, we will indicate a formal criterion: companies with more than 10,000 employees and a complex hierarchical structure (for example, district branches -> regional departments -> central office).

The experience of Intalev consultants in creating budgeting for mega-companies has revealed that in businesses of this scale, indicators that are only auxiliary data for smaller enterprises are separate and specific management objects. Often, to work with numbers that only balance the movement of, let’s say, “main” budgets, separate services and departments with numerous personnel are created. And this practice is justified.

To solve the problem of including balancing indicators in the budget system, the “from the operating budget” model was significantly modernized, eventually turning into a “from the balance sheet” model.

The idea of ​​the balance sheet model of budgets is that movement in any budget, be it natural value, BDR and BDDS, is an analogue of turnover in the debit or credit of accounting accounts, on the basis of which the balance is compiled (all this is also true for management balance sheet accounts ). For example, the Budget of expenses for core activities is the same as the debit turnover in the “Financial Result” account, and the Budget of Cash Payments is the credit turnover in the “Current Account” and “Cash” accounts.

From this we can draw two important conclusions:

A movement on any of the budgets affects, similar to an accounting entry, some second budget (or to be more precise, as in the case of a complex entry that can affect several accounts at once, an operation on one budget can affect several budgets simultaneously).

If it is necessary to create a truly comprehensive (one might even say “total”) budget model, then it should be built on the principle of double entry.

For example, many enterprises maintain a sales budget. From a double entry point of view, any figure entered into this budget should be mirrored in the Accounts Receivable Budget (accounts receivable increased). The Labor Cost Budget is also very common. The data from this budget will also be included in the Budget for settlements with personnel (the company's debt to employees has increased).

Here are a couple of examples where the double entry principle will play a key role in management calculations:

• Let's say a company took out a loan for $500,000. From the point of view of current management, you can easily get by with the “classical” budget scheme: the amount of funds in the current account (Budget of receipts for financial activities) and the planned expenses for debt servicing (Budget of expenses for financial activities) have increased. But there is no information for holistic management of corporate finance: in fact, this operation seriously affected the ratio of equity and debt capital - the company, while increasing its current liquidity, worsened its financial stability indicator. The Capital Flow Budget would help track this point, correctly balance the balance and calculate analytical coefficients.
• When planning functional budgets that are not connected by a clear algorithm, there may be a mismatch of data between them. For example, if a purchasing manager only fundamentally understands that the volume of his purchases is related to the Budget of production needs, then his specific planned figures may not coincide with the opinion of production managers. According to the principle of double entry, the calculation is unambiguous. Let's imagine a series of operations connecting the production program and the procurement plan through functional budgets:

From this calculation it is immediately clear that the production program should generate purchases in an amount of no less than 20 units of raw materials.

Thus, the task of the budgeting director when building a model based on the double entry principle is to compare each of the created budgets to another, balancing budget. Visually, this construction can be done in two formats:

A table in which the rows and columns show the items of the management balance sheet, and the data in the rows reflects debit turnover, and the columns reflect credit turnover. In addition to purely balance sheet items, the table contains the items “Income” and “Expenses”, which are not included in the balance sheet, but are necessary for calculating the results for it. At the intersection of the corresponding rows and columns, functional budgets arise.

A table in which functional budgets are shown in rows and columns, and at the intersection paired relationships between budgets are indicated at the transaction level: the debit turnover of one budget is expressed in the credit turnover of the other, and vice versa.

It is most logical to use both of these formats sequentially: the first - to initially create a list of budgets, starting from the structure of the Management Balance Sheet, and the second - to check the created list of budgets for correctness and completeness.

As a result of structuring budgets on a balance sheet basis, managers of mega-companies receive a management tool in accordance with the profile of their activities: departments supervising production activities - Budget of production expenses, financial services - Budget of financial investments, departments of corporate management - Capital flow budget, etc. Complex business activities become transparent and much more manageable, and the procedure for drawing up the most important final report - the Management Balance Sheet - is quite simple and unambiguous: the balances accumulated by the end of the period for functional budgets will form the corresponding balance sheet items:

Everything that has been said about the items of the Management Balance Sheet also applies to off-balance sheet accounts, on the basis of which, in particular, the funding system is built. The funding logic may look like this: divisions (financial responsibility centers) of the company have the right to form funds as a certain percentage (for example, 10%) of the funds received by this division, and use these funds at their discretion. Thus, the turnover under the Cash Receipts Budget (let’s say $100,000) is automatically linked to the off-balance sheet “Fund” account and, in accordance with established standards, replenishes the fund of the corresponding division (in the described example - by $10,000), without affecting the main balance of the company . Also, through the connection of turnover and balances, overspending on the fund is deducted from allowed expenses for the next period, and savings are added to the next period.

Summarize. It should be noted that the balance sheet model of budgets and its internal relationships are somewhat more complex than the “classical” budgeting scheme (like, probably, any more advanced system compared to its historical predecessors - see the epigraph). But it also carries serious advantages that we have described and are necessary for the effective management of complex business activities, especially in large companies. And the task of specialists from these companies, as well as consultants, is to competently and flexibly configure this system in accordance with the needs of a particular enterprise.

Business transaction- the simplest event in the activities of an enterprise that caused the occurrence of income, costs, expenses, receipts/payments of funds, the formation of balances or the movement of inventory items.

In total, according to the definition, seven types of business transactions can be distinguished:

2. Costs

3. Expenses

4. Cash receipts

5. Payments of funds

6. Remains of inventory items

7. Movement of inventory items

Reflection of business transactions by item depends on which accounting method is adopted by the enterprise:

Option one: according to the “Income – Expense” principle by item;

Option two: postings to the accounts of the management chart of accounts.

In the first case, the articles are final register reflection of business transactions.

In the second case, the articles are analysts(subconto) corresponding accounts.

Difference and relationship between cost and expense items

When forming the structure of articles, it is necessary to distinguish Expenditures And expenditure. Under costs in this case we mean the purchase of materials, consumption of services, etc., carried out in the current period, but not written off in this period to the cost of production, i.e. converted into assets in the form of inventories. Thus, the costs will be reflected in Budget on Balance and, if they have been paid, in Cash Flow Budget.

Expenses(and, accordingly, entries in Budget of Income and Expenses And Profit and Loss Report) for these amounts will arise when these stocks go into production and are consumed, or products are sold/paid for, the production of which was associated with the costs incurred (depending on the rules of the accounting policy adopted by the enterprise).

Since the list of costs (in the sense of a list of purchased materials, etc.) is usually much more detailed than expense items, we can say that expense items aggregate cost items.

Classification of articles by function and level

It is necessary to distinguish between two principles for classifying articles: by function(i.e. what areas of business activity they reflect) and by level(i.e. which hierarchical part of the company they belong to).

By function expense items can be divided into:

1. Expenses for core activities

1.1. Direct expenses

1.1.1. Direct production costs

1.1.2. Cost of purchased goods

1.1.3. Cost of providing services

1.1.4. Direct business expenses

1.2. Overheads

1.2.1. Business overhead

1.2.2. Administrative expenses

2. Expenses for financial activities

3. Expenses for investment activities

4. Expenses for other activities

In addition to this division, overhead items can be classified by company level to which they belong. For example:

1. General shop expenses

2. Referral overheads

3. Business overhead

4. General company overhead

5. General holding overhead costs

Within this classification, articles with same name(For example, “Salary of administrative and managerial personnel”) may refer to different levels of the company. In this case, the amounts of expenses for items at higher levels of the company will be collected and distributed to lower levels (for example, general company expenses will be distributed to businesses, and those, in turn, to areas and products).

To understand the logic of constructing a budget structure, it is necessary to highlight the following classification of budgets:

1. Operating budgets;

2. Functional budgets;

3. Final (consolidated) budgets.

Operating budgets

Operating budget– this is the budget of a separate Center for Financial Responsibility. The purpose of drawing up an operating budget is to plan and take into account the results of economic operations which leads corresponding CFO. Essentially, the operating budget is tool delegation of powers and responsibility to each central financial institution for its financial indicators.

For each central financial district, one (and only one) operating budget is drawn up, therefore, the total number of operating budgets in an enterprise is equal to the number of central financial districts formed in it.

Example. Operating budgets

1. Budget of the Income Center “Business “A”

1.1.1. Finished products

2. Budget of the Income Center “Business “B”

1.1. Sales of main products

1.1.2. Services

3. Budget of the Cost Center “Commerce”

2.1. Business expenses

2.1.2. Salary of sales managers

2.1.3. Sales commissions

2.1.4. Fare

4. Budget of the Cost Center “Marketing”

2.1.6. Internet promotion

2.1.5.2. Functional budgets

The economic activity of an enterprise can be represented as a set of certain functions. In general, the list of these functions will look like this:

1. Sales

2. Procurement

3. Production

4. Storage

5. Transportation

6. Administration (management)

7. Financial activities

8. Investment activities

Operating budget items grouped by attribute functional affiliation, form functional budgets. The purpose of drawing up functional budgets is to determine the resource requirements for various areas of the enterprise.

Each functional budget is compiled according to everything enterprise, therefore, it is the system of functional budgets of the enterprise that forms it budget structure.

Budget structure – system functional budgets enterprises where sequential planning and accounting of the results of economic activities of the entire enterprise.

Budget for direct production costs may, in turn, consist of Budget of material costs, Energy budget, Production depreciation budget etc.

The total budget indicators will give the final financial result: profit/loss or cash balance. But the enterprise can also create additional budgets - not to calculate the financial result, but to control functional areas in several aspects. For example, if there is a need to manage payroll costs throughout the enterprise, then Budget for salary expenses will collect figures from almost all other expenditure budgets, and to avoid double counting, the amount for this budget must be considered separately, without adding it with the same figures, but in the context of production, commercial and other expenses.

Example of a list of functional budgets

Budget type designations:

DR– income-expenses;

DDS– cash flows;

NS– natural value.

The relationship between operating and functional budgets is presented in Fig. 15.

Each functional budget falls into one of three types of budgets:

1. In-kind cost (Budget of Goods, Inventories and Non-current Assets)

2. Budget of Income and Expenses (IBC)

3. Cash Flow Budget (CFB)

To create a comprehensive list of functional budgets, we recommend the following steps:

• highlight areas of the company’s activities;
• create a list of functional budgets of three main types: income and expenses, cash flow, natural value;
• check functional budgets for consistency;
• show connections between budgets.

Functional areas

Functional areas can be said to be managers' view of the business they manage. And since views on the same subject can be different, the principles for classifying areas of activity are often diametrically opposed, even when we are talking about the same enterprise. For example, for a manufacturing enterprise that independently sells its products, options for identifying functional areas may be as follows:

• management of production, sales, purchasing, administrative processes;
• management of fixed assets, circulating inventories, cash, personnel, customer relations, relationships with suppliers;
• management of core, financial, investment and other activities.

Approaches

The work of determining areas of activity is an expert one; there are no strict formalized approaches that determine which classification criterion to choose. The only requirement is convenience and clarity for the team of top managers that will work with the selected classification of functional areas.

What you should pay attention to when highlighting areas of activity:

• the composition of areas of activity must correspond exactly to the business that the company conducts. This sounds self-evident, but in practice there are often situations where this is not the case. For example, there was a precedent when an exclusively trading organization singled out such a functional area as “Production”, although in fact it did not conduct any production;
• It’s worth trying to interpret the processes that the company has quite broadly. For example, if we are talking about a consulting firm, then, despite the absence of material production processes, it has activities that involve spending the working time of its specialists. And this is nothing more than production - a kind of write-off of “raw materials” in the process of manufacturing the final product, even if these final products are consulting services. In other words, a functional area such as “Production” in a consulting company can be highlighted;
• the compiled list of functional areas should cover all of the company's activities. For example, if only areas such as “Sales” and “Production” are defined, then most likely something is forgotten. At the very least, “Procurement” is missing;
• the selected functional areas should not overlap. For example, if “Production” and “Human Resources Management” appear on the list at the same time, then most likely there will be intersections. After all, there are production workers who clearly belong to both “Production” and “Human Resources Management”.

Read more and with examples about functional budgets in