Provides flexible budget. The method of forming a flexible budget. Advantages and disadvantages

Total budget (core budget)? This is a work plan of the enterprise as a whole, coordinated across all departments and functions, uniting blocks of separate budgets and characterizing the information flow for making and controlling managerial decisions in the field of financial planning.

When setting budgeting in any company, it is important to remember that for real financial management you need three main budgets:

• - Budget of Income and Expenditure (BDR)
• - Cash flow budget (BDDS)
• - Forecast (calculated) balance (PB).

The purpose of the budget of income and expenses (BDR) is to show the ratio of all revenues from the sale of goods (works, services) with all types of expenses that the company intends to incur. For example, income is the proceeds from the sale of goods (1000 hryvnia is planned), and expenses are the cost of electricity, office rent, employee salaries (600 hryvnia is planned). Thus, the planned profit of the company will be UAH 400 (income - expenses). The main point of the budget for income and expenses is to show the company's executives the effectiveness of economic activities in the coming period, or, more simply, whether there will be a profit or not. This report is necessary for managing the economy of the enterprise.

The cash flow budget (BDBS) is a plan for the movement of funds on the current account and at the cash desk of the enterprise, reflecting all the projected receipts and write-offs of funds as a result of the company's economic activities. For example, it can be planned for the next month to receive payment from buyers in the amount of UAH 1000 and payment to suppliers for goods in the amount of UAH 800, then the balance on the current account at the end of the month will be positive (UAH 200). The cash flow budget is designed to prevent a shortage of funds in the current account or at the cash desk of the enterprise to pay for important and urgent expenses.

The forecast (settlement) balance sheet is designed to plan and control the movement of all assets and liabilities of the company. To compile the forecast balance, usually, a budgeting chart of accounts or a managerial chart of accounts, other than the accounting one, is used. Therefore, it is possible that the difference between the forecast balance and the accounting one is not only in the amounts, but also in the analytics of the presentation of assets and liabilities. The forecast balance can be used to monitor future financial stability. For these purposes, on the basis of its data, financial ratios are calculated: current and total liquidity, etc.

All major budgets are interconnected with each other and have a number of corresponding items. This is manifested primarily in the BDR and BDDS formats, which have a number of identical items, which reflect current costs and their financing (for example, in the BDR the item “Utilities expenses” and in the BDDS - “Payments for utilities”). But the differences between BDR and BDDS are inevitable.

For example, if the BDR in January reflects the cost of raw materials and materials in accordance with their market value, then in the BDDS the cost of the same raw materials and materials can be determined in accordance with the debt repayment schedule (we pay part in January and part in the following periods). One of the purposes of the forecast (calculated) balance is that it fixes the discrepancies arising between the corresponding articles of the BDR and BDDS.

To draw up the three main budgets and to control various types of costs and financial parameters at different levels of management, other budgets are required: operational support and additional.

Flexible budget prepared during the planning stage? it is a budget for several possible activities within a relevant range.

Table 1 shows the flexible budget of Tortila, compiled for three sales volumes, respectively 7000, 8000 and 9000 suitcases.

In practice, it is difficult to accurately predict the volume of sales, which is why most companies have a flexible budget for the actual volume of activity.

So a flexible budget? it is a budget based on budgetary costs and revenues for the actual volume of activity, or for several relevant levels of proposed activity.

Table 1? Flexible budget of the "Tortila" company

The flexible budget is based on the formula:

(Variable budget unit costs × Actual production or sales) + Total fixed costs.

A flexible sales budget is calculated based on the price used:

(Budget Unit Price × Actual Sales) or (Actual Unit Price × Actual Sales).

At the end of the planning period, it is necessary to draw up a report on the activities of the enterprise, in which the projected and actual indicators will be compared. Depending on the goals of comparison and analysis of the performance indicators of the enterprise, budgets are divided into static (rigid) and flexible.

Static (fixed) budget - a budget calculated for a specific level of business activity of an enterprise, i.e. in a static budget, revenues and expenditures are planned based on only one implementation level. All budgets included in the general budget are static, since the revenues and costs of the enterprise are projected in the components of the general budget, based on a certain planned level of implementation.

When comparing the static budget with the actual results achieved, the real level of the organization's activity is not taken into account, i.e. all actual results are compared with projected results, regardless of the achieved volume of sales. This level of deviation analysis is considered zero. Analysis Level Zero is based on comparing static budget with actual results. A static budget does not provide an opportunity for detailed analysis of an enterprise's activities. A flexible budget is used for this purpose.

Flexible (variable) budget - a budget that is drawn up not for a specific level of business activity, but for a certain range, i.e. it provides several alternative options for the scope of implementation. For each possible implementation level, the corresponding cost is defined here. Thus, A flexible budget takes into account changes in costs depending on changes in the level of implementation, it provides a dynamic basis for comparing the results achieved with the planned indicators.

A flexible budget clearly identifies the link between static budget and actual results. A flexible budgeting is based on the division of costs into variable and fixed. If costs are planned in a static budget, then in a flexible budget they are calculated

For variable costs determine the rate per unit of production, i.e. calculate the size of the unit variable costs. Based on these norms, the flexible budget determines the total amount of variable costs depending on the level of implementation.

In turn, n fixed costs do not depend on the volume of production and sales, and their amount remains unchanged for both static and flexible budgets.

Flexible budget formula is an equation that correctly determines the total budgetary costs for any level of production activity. Using this formula, you can get the budget for any release level.

The essence and significance of budgeting

In the context of budgeting, when making management decisions, the emphasis is mainly on the financial side of the enterprise. This process is carried out at all levels of management and allows you to achieve such important tactical goals as cost optimization, profit maximization, increasing financial stability and improving the level of the company's solvency. Budgeting allows you to balance the finances of an enterprise in accordance with the directions of use of funds, in terms of volumes, in terms of time parameters, etc. Effective budgeting has a positive effect on the work of the company and improves its financial condition as a whole.

Budget is a quantified expression of production and marketing plans that are necessary to achieve the goals set for the coming period.

There are two main types of budgets - rigid and flexible. Thus, a rigid budget is static, rigidly calculated for a specific level of enterprise activity. Hard budgets are part of the overall budget of the enterprise. When analysts compare the hard budget figures with the actual data, they do not take into account the actually achieved performance indicators, but rather compare the actual results with the planned ones. In other words, when analyzing a tight budget, many of the details and aspects that influenced the performance of an enterprise are often overlooked.

The antipode of hard is flexible budget which is used for much deeper and more detailed analysis.

Flexible budget

Definition 2

A budget that takes into account various possible options for changing the performance indicators of an enterprise within a given range is called flexible(or, more rarely, dynamic).

First of all, a flexible budget is required for cost analysis that includes both fixed and variable components. The latter includes administrative and overhead costs, production costs, marketing costs, etc.

A flexible budget is not prepared for any specific level of business activity or indicator, but for a certain range of them. For example, a flexible budget can be designed for several different sales volumes. In other words, dynamic budgets can have several different scenarios. In the case of sales volumes, for each of the possible revenue volumes, the corresponding volume of expenses is determined.

Fundamentals of Flexible Budgeting Methodology

As a rule, when drawing up a dynamic budget, costs are divided at least into fixed and variable. Ideally, a flexible budget is drawn up after analyzing the impact of the volume of sales of products on each of the types of expenses. So, for variable costs, they start from specific variable costs, on the basis of which the total amount of variable costs is then determined, depending on a particular level of implementation. By analyzing various options for output and costs, you can choose the optimal volume

Functions of the budget as a means of monitoring and evaluating the activities of an enterprise are revealed only when the predicted indicators are compared with the actual ones. In other words, at the end of the planning period, it is necessary to draw up a report on the activities of the enterprise, in which the projected and actual indicators will be compared. Depending on the goals of comparison and analysis of the performance indicators of the enterprise, budgets are divided into static (rigid) and flexible.

Static budgets

The initial data are presented in table 16. OJSC "Alpha" produces components for an automobile plant.

Table 16 - Report on the activities of OJSC "Alpha" based on the static budget for 20__ year (rubles)

Static budget - a budget based on a specific level of business activity in an organization. In other words, in a static budget, income and expenses are planned based on only one implementation level (in the above example, all income and expenses are calculated for 9000 products). All budgets included in the general budget are static, since the revenues and costs of the enterprise are projected in the components of the general budget based on a certain planned level of implementation. When comparing the static budget with the actual results achieved, the real level of the organization's activity is not taken into account, i.e. all actual results are compared with projected results, regardless of the actual sales volume achieved. This level of deviation analysis is considered zero. Reports on the activities of Western companies usually begin with it.

Zero level of analysis

As a result of comparing actual and planned indicators, deviations from the static budget are revealed (Table 16). The above calculations may result in the following conclusions: the deviation from the static budget was mainly influenced by a sharp decrease in the volume of sales; along with the volume of sales, costs also fell. Was the cost reduction in line with the production cut? Of course not. Indeed, as a result, despite the decrease in variable costs, the marginal income also decreases, therefore, the rate of cost reduction lagged behind the rate of decline in sales volumes.

The static budget does not provide opportunities for a more detailed analysis of the activities of the enterprise. A flexible budget is used for these purposes.

Flexible budgets

Table 17 - Report on the activities of OJSC "Alpha" based on a flexible budget for 20 ... year

A flexible budget is a budget that is not prepared for a specific level of business activity, but for a specific range, i.e. it provides several alternative options for the scope of implementation. For each possible implementation level, a corresponding planned cost amount has been defined in the flexible budget. Thus, the flexible budget takes into account changes in planned costs depending on changes in the level of sales; it is a dynamic basis for comparing actual results achieved with planned indicators.

First level of analysis

The task of the analysis of the first level is to identify, due to which there were deviations of the actual value of profit from the planned budget. There are two possible reasons: a change in the volume of sales and a change in the total amount of costs (deviations from the flexible budget).

To identify deviations in the volume of implementation, the indicators of two budgets are compared - static and flexible (the calculation of the flexible budget is shown in Table 17). The flexible budget includes planned income and expenses, adjusted for the actual volume of sales. The static budget, on the other hand, includes income and expenses, calculated based on the planned volume of sales (9,000 pcs.). Both budgets use the same planned cost per unit of sales. Thus, the differences between these budgets are solely due to differences in the volume of implementation. This indicator characterizes, first of all, the quality of work of the head of the sales department to achieve the planned level of implementation.

Comparison of actual indicators with flexible and general (static) budgets is shown in Table 18.

Table 18 - Comparison of actual indicators with flexible and general budgets

When comparing actual indicators with predicted ones, the concepts of efficiency and productivity are used in management accounting. Efficiency is the degree to which a set goal has been achieved. Productivity is the degree to which resources are used to achieve a set goal. To calculate this indicator, it is necessary to compare the actual results with the applicable standards (norms), in particular: with the standard of material costs per unit of product (in physical terms), with the standard of material consumption (in rubles), with the standard for the cost of working time for the manufacture of a unit of product (hours), with the standard of labor costs in monetary terms (rubles / hour). Looking at the deviation of actual data from the static budget in terms of efficiency and productivity, we can say that deviation from the volume of implementation is a measure of the effectiveness of the organization. When comparing the planned sales volume (9000 units) with the actual (7000 units), it can be concluded that the analyzed enterprise is operating ineffectively and the unfavorable deviation of profit for this reason is 26870 rubles. (table 16).

Performance can be assessed by comparing cost variances. In this case, the total actual costs exceeded the planned costs for the given sales volume compared to the flexible budget. This means that the activities of OJSC "Alpha" turned out to be not only ineffective, but also ineffective. This is followed by an analysis of price variances (second level) and productivity (third level).

Second level of analysis

Analyzes the deviations from the flexible budget for the price of resources planned and actually spent. This deviation is calculated by the formula:

Third level of analysis

Assumes analysis and assessment of the degree of resource efficiency and is calculated as follows:

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