Управленческий учет на предприятии

4

2006

200

190

50

2007

200

185

80

2008

200

191

20

Task 8.

To find a deviation on labor productivity:

Year	Standard working hours for the actual output, h.	Actually fulfilled time	Standard rate of a salary
1	2	3	4
2004	48	50	160
2005	48	48	170
2006	48	51	180
2007	48	40	180
2008	48	50	180

Task 9.

To find a deviation of variable production overhead costs by efficiency:

Year	Standard working hours for the actual output, h.	Actual time	Standard rate of the NR variables
1	2	3	4
2006	42	11	20
2007	12	11	20

Task 10.

To find a deviation of constant overhead costs:

Year	Budget constant overhead costs	Actual constant overhead costs
1	2	3
2008	8 000	8 000
2009	9 000	8 500

Task 11.

To find a deviation on the volume of constant overhead costs:

Year	Actual output	Budget output	Standard rate of distribution
1	2	3	4
2008	6 000	6 000	160
2009	7 000	6 100	120

Task 12.

To find a volume deviation by efficiency:

Year	Standard quantity of time for the actual output	Actually fulfilled time	Standard rate of distribution of constant overhead costs
1	2	3	4
2008	120	100	120
2009	120	110	180

Task 13.

To find a deviation on power:

Year	Standard quantity of time for the actual output	Budget working hours	Standard rate of distribution of constant overhead costs
1	2	3	4
2005	22	25	160
2006	22	25	120
2007	21	25	110
2008	40	50	100
2009	40	50	100

Tests

1. At what method the accounting of expenses and determination of product cost conduct on each repartition, a phase, a production stage?

A) poperedelny;

B) straight line;

C) the job order;

D) the standard;

E) on Direkt-kosting system

2. In what essence of a standard method of the accounting of expenses?

A) factor cost on each object is fixed within the estimated standard costs and separately the sum of deviations from standard costs, the sum of changes from norms;

B) expenses carry directly on that object of the account on which estimate product cost;

C) the accounting of expenses and determination of product cost conduct on norms of expenses without allocation of deviations;

D) expenses are considered on actual cost without allocation of deviations;

E) only variable expenses are considered

3. Call the reasons of emergence of a deviation at the price of materials:

A) change of design of production;

B) replacement of work various complexity degrees;

C) unexpected general rise in prices, change of discounts;

D) consequences of training effects;

E) control and improvement of methods of working conditions;

4. Reasons for rejection on use of materials are:

A) high or low level scrap consumption;

B) unexpected national awards;

C) overtime or the bonus payments distinguishing from the plan

D) personnel training;

E) labor productivity level change.

5. On a rate of a salary it is possible to call reasons for rejection:

A) awards, replacement of work of various degree of complexity;

B ) change of design of production;

C) replacement of raznosortny materials;

D) various sources of supply;

E) seasonal effect, for example heat power in the winter.

6. Choose the reasons adverse a deviation on materials:

A) materials at inflated price, untimely delivery of materials;

B ) use of experts with qualification is higher, than it is required;

C) excessive expenses of time;

D) bad control of work;

E) faulty cars and equipment.

Recommended literature

1. «Strategic management of expenses» J. Shank, Century Govindaradzha

2. «Standard method of the account» Garifullin K.N.

3. «Management by exception» Leicester R. Bittel.

4. «The management and production accounting» Introduction course. Colin Druri.

5. Standard accounting.

6. Garasim P. M. Course upravl_nsky обліку [Text]: Navchalny pos_bnik / Item M. Garasim, G. P. Zhuravel, Homin. - To. : Znannya, 2007. - 314 pages.

7. Heads S.F. Upravl_nsky облік [Text]: p_druchnik / page F. Heads. - 4th look. - To. : L_bra, 2008. - 704 pages.

8. Zagorodny A. Management accounting as system of information support of administrative decisions [Text] / A.Zagorodny, G. O. Partin//Accounting and audit. - 2004 . - N 7. - S.35-38.

9. Kostyakova A.A. Upravl_nsky облік і to a problem класифікац і ї витрат [Text] / A.A. Kostyakova//V_snik Sumsky nats_onalny agrarian університету. - 2007 . - N 6. - S.314-318.

10. Lavrushin O. I. Than differ financial and management accounting of the [Text] / Island. I.Lavrushin//Bank management. - 2008 . - N 7. - S.16-19.

11. Laziness V. S. Upravl_nsky облік [Text]: Navchalny pos_bnik / Century S.Len. - 2 Ges look. виправл. - To. : Znannya-Pres, 2006. - 317 pages.

12. Nazarchuk T.V. Structure efektivno ї to system управління витратами promislovy p_dpriѕmstvo [Texts] / T.V. Nazarchuk//Reg_onalna економіка. - 2006 . - N 3. - S.50-58.

13. Nikitin N. Cost management system and its role in financial management [Text] / N of Nikitin, L.Paramonov//Problems of the theory and practice of management. - 2006 . - N 11. - S.51-56.

14. Nikolaev S. Myths of management accounting of the [Text] / Village of Nikolaev//Bank management. - 2008 . - N 7. - S.2-11

15 . Podolyak N. V. Integration of accounting and management accounting [Text] / N V. Podolyak//International accounting. - 2008 . - N 1. - S.51-56.

16. Radetska L.P. Upravl_nsky облік [Text]: Navchalny pos_bnik / L.P. Radetska, L.V.Ovod. - To. : Академія, 2007. - 352 pages.

17. Sukhina, L.P.Ispolzovaniye of information on expenses in accounting and management accounting: problems and ways of their solution of [Text] / L.P. Sukhina//Aktualn_ to a problem економіки. - 2008 . - N 3. - C. 206-213.

18. Terekhov, V.A.Mezhdunarodny experience of the organization of management accounting [Text] / VA. Terekhov//International accounting. - 2007 . - N 4. - S.32-41.

19. Terekhov, V.A.Mezhdunarodny experience of the organization of management accounting [Text] / VA. Terekhov//International accounting. - 2007 . - N 5. - S.44-50.

20. Chernenko, A.F.Kto has to be engaged in management accounting of [Text] / A.F. Chernenko//Bank management. - 2008 . - N 7. - C. 19-25.

Chapter 10. Accounting implication of byproduct processing

10.1 Main concepts of expenses of complex production and byproduct

Expenses complex or coproductions (joint cost). The expenses connected with uniform technological process during which two or more products (or services) are made concern to them. Joint products (joint products) are two or more products which (1) have considerable market cost and (2) don't exist as individual products to a section point. By-products (byproducts) are products which.

(1) have insignificant market cost in comparison with the main products,

(2) with them to a point of the section Point of the Section (Split-off Point) is a point in technological process where joint and by-products become individually identified. Any expenses after this point are divisible (separable cost), i.e. straight lines. In complex productions it is impossible to make one product without another though proportions can differ. The reasons of distribution of expenses of complex productions on individual production or service generally the same, as at any distribution of expenses. They include:

1. Assessment of stocks and prime cost of realized production for external financial reports and tax authorities.

2. Assessment of stocks and cost of sales of production for the internal purposes, for example awarding of performers.

3. Definition of expenses under contracts in which sale to the buyer only parts of in common made products or services is provided. Methods of distribution of expenses. There are three main approaches to an assessment of stocks and prime cost of realized production of complex productions:

1. At distribution of expenses market prices (a method of market cost in a section point, a method of an assessment of the net realizatsionny value (NRV) and a method of a constant share of gross profit (a gross margin) in volume of net realizatsionny value) are used.

2. At distribution of expenses natural indicators are used.

3. Expenses aren't distributed. For an assessment of stocks data on market price are used. Cost method in a section point. Method of market prices (sules value at split-off method). At this method complex expenses are distributed on the basis of the relative cost of a product in a section point. At this method in a basis of calculation take the cost of realization of all production, including not sold part. Method of natural indicators (physical measure method). At this method of distribution of complex expenses on the basis of their relative ratio in a point of the section the actual indicators, such, as the weight or production volume are used. The advantage of this method that distribution of expenses isn't influenced by fluctuations of market prices. Method of pure realization, or net realizatsionny value (estimated net realizable value method). Complex expenses are distributed on the basis of their relative net value of realization. At application of a method of pure realization the percent of distribution is subject to changes in connection with fluctuation of a factor cost at further processing of products. The method of pure realization is limited by one point of the section. Therefore, at a set of points of the section additional distribution is required. Method of constant percent of gross profit. At this method of expense of complex productions are distributed so that the general percent of gross profit was identical to each type of production. This method includes the following three steps: Step

1. Calculation of percent of gross profit. Step

2. Definition of the general expenses on each product. Step

3. Distribution of expenses of complex production. Insignificant assumption when using this method is that the uniform interrelation between expenses and sales volume at individual level on each product is supposed. Such dependence is seldom observed in the companies with the wide range. (Distributed costs of production not always are positive when using this method. On some products of expense of complex production belong with a minus sign) Direct write-off of expenses of complex production. Earlier stated methods assumed reference of expenses of complex production on a concrete product. As all of them have the shortcomings, many companies prefer to write off joint costs of complex production of realization.

Comparison of methods. The method of pure realization approaches for the following reasons: Doesn't depend on the subsequent decisions of the management on continuation of technological process after division of products. Accurate universal base of distribution - money. Differs simplicity, especially in comparison with a method of constant percent of gross profit. It is supposed that if market cost in a point of the section can't be determined, it is necessary to choose the second method. Complexity of use of a method of natural indicators is various on separate branches. Distinctions between complex and by-products, and also waste consist in their relative realizatsionny cost. Therefore, these distinctions are unstable, they nonplus terminology and practice of the account. We remind that by-products are a result of complex productions. They have lower cost in comparison with the realizatsionny cost of joint or main products. It is impossible to draw also a clear line between waste and by-products.

There is a point of view that a by-product: (a) has the big market cost, than waste, and often (would) be object of further technological process while waste usually is on sale at once. Bases of the accounting of by-products and waste same. It is considered the best the option reducing expenses on the main product by market cost of by-products or waste. Methods of the accounting of by-products. Two main methods of the account collateral a product» admit the most acceptable at their account: (1) on time of the actual realization and (2) on time of the actual production.

Method 1. The net proceeds from the realized by-products are gross proceeds from sales of by-products minus divisible expenses. The received net proceeds are subtracted from expenses on sold main production.

Method 2. The predicted net realizatsionny value of the made by-products is realizatsionny cost of made collateral production minus the corresponding divisible expenses which are already suffered or can arise. Net realizatsionny value is subtracted from expenses on made main production. In a method 1 it is often supposed that the by-product is accompanying and doesn't justify costs of registration procedures. Not sold by-products are estimated at the zero cost though for control the quantitative account can be conducted. In a method 2 try to connect the expected cost of realization of by-products with costs of the made main product. This method excludes influence of a temporary log between production and sale. Stocks of collateral production are considered on the estimated net realized value (plus divisible expenses if hedgehogs are). Comparison of methods. Both methods are directed on reduction of expenses on the main production. The method 2 is more correct on time at reduction of expenses. Consideration of two periods together shows that the cumulative income on both methods is uniform also the same (in the first method there are no remains for the period beginning, in the second - for the end). Distinction of methods lifts some theoretical problems concerning comparison of revenue and the income. But from the point of view of efficiency extended the technician of the account usually leads comparison to the most expedient alternative. The by-products used for own needs. Sometimes by-products are used for own needs as fuel or even as a component of new party of raw materials in production of the main product. In this case by-products are considered at estimated realizatsionny cost or at the replaced cost; in turn, expenses on the main production decrease by the same sum.

10.2 Methods of distribution of complex expenses

There are three main approaches to an assessment of stocks and prime cost of realized production of complex productions:

1. At distribution of expenses market prices (a method of ryknochny cost in a section point, a method of an assessment of the net realizatsionny value (NRV) and a method of a constant share of gross profit (a gross margin) in volume of net realizatsionny value) are used.

2. At distribution of expenses natural indicators are used.

3. Expenses aren't distributed. For an assessment of stocks are used dankny about market price.

Cost method in a section point. Method of market prices (sules value at split-off method). At this method complex expenses are distributed on the basis of the relative cost of a product in a section point. At this method in a basis of calculation take the cost of a rekalization of all production, including not sold part.

Method of natural indicators (physical measure method). At this method of distribution of complex expenses on the basis of their relative ratio in a point of the section the actual indicators, such, as the weight or production volume are used. The advantage of this method that distribution of expenses isn't influenced by fluctuations of market prices.

Method of pure realization, or net realizatsionny value (estimated net realizable value method). Complex expenses on the basis of their relative net value of realization. At application of a method of pure realization the percent of distribution is subject to changes in connection with fluctuation of a factor cost at further processing of products. The method of pure realization is limited by one point of the section. Therefore, at a set of points of the section additional distribution is required.

Method of constant percent of gross profit. At this method of expense of complex productions are distributed so that the general percent of gross profit was identical to each type of production. This method includes the following three steps:

Step 1. Calculation of percent of gross profit.

Step 2. Definition of the general expenses on each product.

Step 3. Distribution of expenses of complex production.

Insignificant assumption when using this method that the uniform interrelation between expenses and sales volume at individual level on each product is supposed. Such dependence is seldom observed in the companies with the wide range. (Distributed costs of production not always are positive when using this method. On some products of expense of complex production belong with a minus sign).

Direct write-off of expenses of complex production. Earlier izlozhenkny methods assumed reference of expenses of complex production on a concrete product. As all of them have the shortcomings, many companies prefer to write off joint costs of complex production of realization.

Comparison of methods. What method of distribution of expenses to choose? Everyone has shortcomings. The method of pure realization approaches for the following reasons:

Doesn't depend on the subsequent decisions of the management on continuation of technological process after division of products.

Accurate universal base of distribution - money.

Differs simplicity, especially in comparison with a method of postoyankny percent of gross profit.

It is supposed that if market cost in a point of the section can't be determined, it is necessary to choose the second method. Complexity of use of a method of natural indicators is various on separate branches.

Distinctions between complex and by-products, and also waste consist in their relative realizatsionny cost. Therefore, these distinctions are unstable, they nonplus terminology and practice of the account.

We remind that by-products are a result of complex productions. They have lower cost in comparison with the reaklizatsionny cost of joint or main products.

It is impossible to draw also a clear line between waste and by-products. There is a point of view that a by-product: (a) has the big market cost, than waste, and often (would) be object of further technological process while waste usually is on sale at once.

Bases of the accounting of by-products and waste same. Nailuchkshim is considered the option reducing expenses on the main product by market cost of by-products or waste.

Methods of the accounting of by-products. Two main methods of the account collateral a product» admit the most acceptable at their account: (1) on time of the actual realization and (2) on time of the actual production.

Method 1. The net proceeds from the realized by-products are gross proceeds from sales of by-products minus dividends. The received net proceeds are subtracted from expenses on sold main production.

Method 2. The predicted net realizatsionny value of the made by-products is realizatsionny cost of made collateral production minus the corresponding divisible expenses which are already suffered or can arise. Net realizatsionny value is subtracted from expenses on made main production.

In a method 1 it is often supposed that the by-product is sokputstvuyushchy and doesn't justify costs of registration procedures. Not sold by-products are estimated at the zero cost though for control the quantitative account can be conducted.

In a method 2 try to connect the expected cost of realization of by-products with costs of the made main product. This method excludes influence of a temporary log between production and sale. Stocks of collateral production are considered on the estimated net realized value (plus divisible expenses if hedgehogs are).

Comparison of methods. Both methods are directed on reduction of expenses on the main production. The method 2 is more correct on time at reduction of expenses. Consideration of two periods together shows that the cumulative income on both methods is uniform also the same (in the first method there are no remains for the period beginning, in the second - for the end). Distinction of methods lifts some teoretikchesky problems concerning comparison of revenue and the income. But from the point of view of efficiency extended the technician of the account usually leads comparison to the most expedient alternative.

The by-products used for own needs. Sometimes by-products are used for own needs as fuel or even as a component of new party of raw materials in production of the main product. In this case collateral про¬дукты are considered at estimated realizatsionny cost or at the replaced cost; in turn, expenses on the main production decrease by the same sum.

10.3 Accounting of a byproduct

As collateral production is insignificant for production, it usually doesn't participate in distribution of expenses of coproduction. Net value of realization of a by-product is the cost of sales minus various divisible expenses or realizatsionny expenses. This cost or is considered in balance as an other expenses, or subtracted from coproduction expenses before distribution of these expenses between in common made products. If it is required to define profit on by-product realization, the net value of realization should be reduced by extra charge size on profit. It is necessary then to subtract the received result from the volume of expenses of coproduction.

Recognition of net proceeds. The net proceeds from realization of a by-product can admit process of production or after sale. If the net proceeds admit process of production of a by-product, the estimated cost of sales acts as sale price. If the actual price is other, the account called by the profit and loss account is applied to registration of this difference. If the net proceeds admit after sale, it is necessary to use the actual price of realization. When possibilities of sale of a by-product aren't clear or when the prices of it are unstable, it is better to postpone revenue recognition until realization.

1. Let's distribute coproduction expenses provided that the mini is carried out under article the other income. For this purpose we use a method of net value of realization in a point of division of production expenses.

2. Let's distribute coproduction expenses if the income from realization mini goes on reduction of expenses of coproduction. Mini: 500 gallons for $1,50 for gallon equal $750 full revenue. $36000 expenses of coproduction minus $750 equal $35250 which are subject to distribution.

3. Let's put 30% of a trade extra charge for by-product realization. Let's distribute coproduction expenses, using a method of net value of realization in a point of division of production expenses. The received sale price is subtracted from coproduction expenses.

4. Let's say $1 is the share of a grade mini for gallon of divisible expenses then the product can be sold for $4 for gallon. Besides, before lubricating oil will be sold for $14 for gallon, on it carry $4 for gallon of divisible expenses. Let's distribute coproduction expenses, using a method of net value of realization in a point of division of production expenses, and we will find the size of gross profit after distribution of expenses, thus the income from realization of a by-product follows and. To subtract from coproduction expenses.

Process of distribution of expenses shares on three main stages.

1) Choice of object of the accounting of expenses. Object of activity which assessment requires a separate indicator of expenses is called as object of expenses. Structural divisions, types of production, technological processes, types of works, contracts, orders, marketing territories can be examples.

2) Selection and accumulation of the expenses relating to this object of the account. Examples are production expenses, trade and administrative expenses, coproduction expenses, the general expenses, expenses of serving divisions, constant expenses.

3) Choice of a method of combination of the item I) with item 2). Usually indicators in man-hours, machine-hours and units of production form base of distribution of production expenses. Distribution of the income and variable expenses usually. it is carried out by a direct way as they are directly connected with a concrete segment or aspect of activity. Factor cost is traced up to a concrete product or the territory. Partially traced expenses (for example, on advertizing) cover some products. Indirect expenses can't be identified directly with a product therefore to be distributed between objects of expenses they have to proceeding from logic reasons, for example distribution of a rent proportionally to the area of the room occupied by structural division.

Questions

1. Main concepts.

2. Methods of distribution of complex expenses

3. Accounting of a by-product

Situational tasks

Task 1

To calculate advancing coefficient:

year	Labor productivity index	Index of an average salary
1	2	3
1999	80	90
2000	36	50
2001	88	70
2002	90	25
2003	60	70
2004	62	70
2005	72	75
2006	76	77
2007	79	80
2008	80	85

Tests

1. What accounting record is formed at write-off of actual cost of finished goods

A) Дт 1320th «Finished goods»

Кт 8010 «The main production»;

B) Дт 1341 «Incomplete main production»

Кт 8010 «The main production»;

C) Дт 8020 «Semi-finished products own production»

Кт 8010 «The main production»;

D) Dt 8010 «The main production»

Кт 1341» Incomplete main production»;

E) Дт 1311 «Raw materials and main materials»

Кт 8010 «The main production»

2. On what accounts expenses of future periods are considered?

A) 1620, 2920;

B) 12010, 1280;

C) 685,686;

E) 7210;

E) 7110

3. In what method of the accounting of expenses and calculations of product cost are inherent semi-finished and bespolufabrikatny options:

A) to the poperedelny;

B) to simple method;

C) to the job order;

D) to the standard;

E) to the combined.

Recommended literature

1. Aldaniyazov, K.N.Upravlenchesky accounting and analysis: studies. grant / Korkembay Nazarovich Aldaniyazov. - Almaty: Yurid. litas. 2008 . - 364 pages.

2. Druri K. Introduction in the management and production accounting. - M: Audit, 1994. - 10 pages.

3. Armless P.S.Uchet of expenses and calculation in the industry (Questions I of a series, methodology, the organization).- M: Finance and statistics, 2003. - 50 pages.

4. Myullendorf R., Karrenbauzr M. Production account. - M. :ZAO «FLN-PRESS», 1996. - 200 pages.

Chapter 11. Budgeting and drawing up the main budget

11.1 Budgeting as basis of planned work of the subject

Now in management of financial results of activity apply budgeting which, on the one hand, represents process of drawing up financial plans and estimates, and with another - the administrative methodology intended for development and increase of financial validity of made administrative decisions more and more. Budgeting represents technology of financial planning, the account and control of the income and the expenses received from business at all levels of management, allowing to analyze the predicted and received financial performance. It allows to operate financial results both separate business, and the enterprise as a whole. Scientists and practicians still didn't come to a consensus concerning definition of the concept «budgeting» (tab. 1).

Table 11. 1 - Most often meeting definitions of the concept «budgeting»

№	Concept «budgeting» definition
1	The financial plan covering all aspects of activity of the organization, allowing to compare all incurred expenses and the received results in financial terms for the forthcoming period of time as a whole and on separate subperiods
2	The forecast of a financial condition of firm approved by the head in which the main limits of expenses and expenses, standards of financial results, various target financial performance are defined
3	The financial plan, i.e. expressed in figures planned for future financial condition of the enterprise or firm, financial quantitatively certain expression of results of market researches and the production plans necessary for achievement of goals
4	Process of development, execution, control and the analysis of the financial plan covering all aspects of activity of the organization, allowing to compare all incurred expenses and the received results in financial terms for the forthcoming period as a whole and on separate subperiods
5	Decision-making process concerning an investment of means
6	Process of drawing up (development) and implementation of budgets
7	Technologies of financial management
8	Component of financial planning
9	System of the coordinated management of enterprise divisions

Any economic subject of managing, irrespective of scales of activity, an organizational and legal form, branch, specialization, first of all looks for answers to a question: where to find sources of financing and how effectively to spend means, that is how to provide inflow of money (income) and to optimize their outflow (expenses). Income of economic subjects is formed as result of commercial activity, i.e. sale of production, goods, works, services. Expenses arise in the course of acquisition of raw materials, materials, energy, fuel, services at other commercial structures. In the conditions of market economy cash flows substantially are defined by commerce, realization and acquisition of goods therefore budgeting as the instrument of planning, the account, control, the analysis and regulation of cash flows at the level of the enterprise and its divisions it is necessary to call commercial more precisely.

Table 11.2 - the Purposes, objects and subjects, and the principles of commercial budgeting

Budgeting elements	Maintenance of elements of budgeting
Budgeting purposes	Achievement of optimum financial results
	Coordination of parameters of development of the enterprise with own and loan resources
	Guaranteed implementation of financial obligations of the enterprise before workers, shareholders, suppliers, bank, the budget
	Providing the management with timely, full and exact information on future and real financial position of the enterprise, necessary for adoption of operational administrative decisions
Objects of budgeting	Types of business (the isolated kinds of activity, production, works, services)
	The cash flows connected with production and realization of certain types of production, works, services
	Production and sale of production, works, services
	The financial estimates, predicted volumes of attraction of external financial resources (the credits and investments)
	Relationship with contractors, the budget and off-budget funds
	Business activity
Subjects of budgeting	Budgetary commission (committee)
	The departments participating in preparation of budgets
	Functional services and departments which are responsible for preparation of budgets of the enterprise as a whole
	The elements of financial structure forming budgets of divisions and separate types of business
Principles of budgeting	Unity of the budgetary system
	Differentiation of the income and expenses between levels of the budgetary system
	Independence of budgets
	Completeness of reflection of the income and expenses of budgets
	Balance of budgets
	Efficiency and economy of use of budgetary funds
	Рublicity
	Reliability of budgets
	Addressing and special-purpose character of use of budgetary funds

It is necessary to share three concepts accurately: planning, programming and budgeting (tab. 11.3).

Table 11. 3 - Difference of definition of the concept «budget» from other similar concepts

Concepts	definition
plan	The system is more whole also than strategy on their achievement
program	Complex of actions for realization of strategy
budget	This and financial expression is more whole, strategy and the planned actions, it both planned financial estimates and schedules of the expenses, predicted financial results of execution of programs and the expenses necessary for this purpose

Among the decisions entering into the Business Performance Management complex, systems of planning and budgeting take a special place. The matter is that today this direction is the most demanded, and often with these tasks of the enterprise begin introduction of the EPM systems. The word «budgeting» appeared in Russian relatively recently though it is necessary to recognize that the subject of planning (both operational, and financial) isn't new: it is enough to remember appropriate sections техпромфинплана which within decades was applied at the Soviet enterprises.

System of plans of the enterprise.

In any organization the system of plans has hierarchical character, thus various plans differ from each other on the horizon of planning and extent of specification. Some types of plans are formed and supported by transaction systems (for example, ERP or the automated banking systems). But to create these plans, transaction systems need information which has to arrive from plans of higher level - the strategic business plan, sales plan and operations and (for production) the main production plan. These plans which are within the competence of EPM system, are formed on the basis of aggregated information and cover longer intervals of planning. Both levels of control systems - EPM and transaction systems (ERP and others) - «are closed» at the level of one of plans (for production it is the main production plan), which is formed in EPM system and then is transferred to Enterprise resource planning as initial information on the basis of which then plans of lower level are made.

The strategic business plan represents most the general plan of development of business. It is the plan establishing main objectives of the enterprise and a task which the company wants to solve during the next several (as a rule, from two to ten) years. The long-term forecasts considering the most different aspects - marketing, financial, production and technical form a basis of the strategic plan.

The sales plan and operations (Sales and Operations Plan, SOP) is developed on the basis of the strategic plan and is urged to concretize strategic parameters of activity of the enterprise. It contains the generalized indicators of activity of the company: output and production realization, volumes of available stocks, sizes of consumed resources. All these indicators are presented in the aggregated look, in a section of groups of production, groups of goods, groups of mat.

The main production plan (Master Production Schedule, MPS) has higher extent of specification: if the sales plan and operations contains data on groups of production, MPS is formed in a section of concrete types of products. This transition from the aggregated data to more detailed information allows to consider the main production plan as a key element of system of the planning, providing detailed calculations of production and realization of production, consumption of materials and use of capacities.

With operational plans in which the attention is concentrated on natural indicators, financial plans (budgets) are closely connected. As the corporate budget usually understand a comprehensive plan of activity of the company, expressed in financial performance (articles) and a covering certain interval of time. Respectively, budgeting is understood as all set of the administrative processes providing life cycle of the budget. This concept includes development of the budget (including coordination and the statement), control of its execution (an assessment of compliance of the plan and the fact), and also the analysis of the reasons of deviations of actual data from the planned. Thus, budgeting includes two basic elements - planning and control.

Schematically communication of budgeting with strategic corporate governance can be presented as is shown in figure 11.1.

Planning and budgeting functions.

Being complex administrative processes, planning and budgeting have so complex impact on a corporate management system. It is possible to distinguish the following from the main functions of system of planning and budgeting:

* planning and coordination;

* decision-making and delegation of powers;

* activity assessment;

* assessment and revaluation of tendencies;

* interaction and motivation of the personnel;

* control and analysis.

Structure of the budget of the enterprise.

As a rule, structuring the corporate budget provides existence of two groups of plans - functional (or operational) budgets and the main budget (sometimes it call the master budget). The standard structure of the budget can be schematically presented as is shown in figure.

Into structure of group of functional budgets of the enterprise enter:

* the budget of sales - the plan expressed, first of all, in financial terms, but allowing and presence of natural indicators. Often the greatest difficulties are caused by drawing up this budget that is explained by big degree of uncertainty of basic data;

* the production budget - is under construction by updating of the budget of sales taking into account level entering (for the beginning of the period of planning) and proceeding (for the period end) stocks of finished goods and a work in progress. As a rule, also includes natural indicators;

* the budget of production expenses - contains volumes of the resources necessary for implementation of the plan of production, and also need for purchases of resources from outside, taking into account entering and proceeding warehouse positions on materials. This budget, as a rule, is under construction in a section of separate types of resources (materials, work, indirect expenses) and also is expressed both in cost, and in quantitative units;

* the budget of cost of sales - is under construction by updating of the budget of production expenses (including purchases) taking into account entering and proceeding stocks as materials, and finished goods;

* the budget of non-productive expenses - includes costs of marketing, management, and also other expenses of non-productive character generalized in a section of financial structure of the organization (the centers of financial responsibility, the centers of expenses, the centers of the income).

As for the main budget, it consolidates in itself(himself) information presented in listed above separate plans, and, as a rule, includes three main components:

* the budgetary balance - the report characterizing a financial condition of the enterprise for the end of the budgetary period. It is often supplemented with indicators of movement of the fixed and working capital for the period;

* the budgetary profit and loss report - is under construction on the basis of the budget of sales, the budget of cost of sales and the budget of non-productive expenses;

* the cash flow budget - is under construction taking into account terms of financial receipts and payments, in view of conditions of calculations with debtors and creditors.

Besides, the main budget is often supplemented with such element, as the budget of capital investments (the investment budget). In fact, this budget represents «pressing» from above-mentioned parts of the main budget, regarding capital expenditure and projects.

Some methods and approaches.

Concepts of rigid and flexible budgets belong to number of the important theoretical concepts which knowledge is necessary at creation of system of budgeting. Distinction consists in, whether is considered by drawing up the budget dependence of the budgetary indicators on intensity of operations (level of business) of the enterprise.

The rigid budget, is formed for one fixed (planned) level of production and therefore doesn't consider distinctions between constants and variable expenses. Therefore such budget is of little use for the analysis of deviations on expenses in case the actual level of production significantly differs from the planned.

The flexible budget proceeds from distinctions in behavior of constants and variable expenses and represents the «set» consisting of several rigid budgets, each of which corresponds to a certain level of activity (or to the range of levels). Thus values of levels of activity get out so that to reflect essential points on reaching which the behavior of expenses significantly changes. At budget performance control the planned part is recalculated, proceeding from the actual level of activity or other factors concerning which the rigid budget was planned. It allows to provide comparability of planned and actual data.

One more important theoretical aspect - the principles of revision and updating of the budget. Many companies prefer to use the sliding budget. It is the budget which is regularly updated eventually; thus by the period of planning one interval of time in the future (we will tell, month or quarter) is added and one (expired) period in the past is subtracted. Thus, the important administrative problem is solved - the company always has the plan for the subsequent twelve (or more) months, and the budget is constantly supported a «actual» condition, taking into account all information, available managers at the time of its prolongation.

At last, one more concept which, according to authors, deserves attention - functional and cost budgeting (activity based budgeting, ABB). This method is logical continuation well-known (but very seldom put into practice, especially in Russia) concepts of the functional and cost account (Activity Based Costing, ABC). Approach of ABB is similar to ABC approach: expenses are consumed by functions, and functions are consumed by products. Therefore functional and cost budgeting provides: allocation of the main functions, definition for each of them activity measuring instruments (carriers of expenses), determination of cost of unit of each carrier of expenses, and then - definition of planned levels of activity and the corresponding planned expenses.

Planning and budgeting organization.

It is important to imagine also scopes of budgeting as process of drawing up financial plans and estimates. Budgeting is applicable to a set of objects: to the company or the enterprise as a whole, to separate structural division (the budget of department, shop, a site etc.), the program of works or management function (the budget of business expenses, the budget of sales, etc.), to the separate contract or the project, specially allocated centers of the account (the profit centers, the centers of expenses, etc.) . At budgeting statement as process it is important to choose object of budgeting and to define levels of drawing up and the consolidations of budgets corresponding to levels of administrative hierarchy (budgets of subsidiaries, the centers of financial responsibility). At statement of budgeting there can't be universal rules, methods and the procedures strictly described in economic literature or fixed in regulations on accounting as it always represents a scope for creativity because any economic subject is unique and unique. Along with budgets for the forthcoming period reports on performance of budgets for expired time have to be formed, and also be compared planned and actual indicators. By results of comparison the analysis of deviations, i.e. an assessment of level of deviations of the actual indicators from planned and the reasons of their emergence which can be measured in absolute and in relative units of measure has to be carried out. Deviations can pay off between the indicators planned for the certain period, and in relation to any basic period. The plan fact the analysis can be carried out for all main budgets, and if necessary - for separate operational budgets. It can be carried out and for the company as a whole, and for its separate businesses. In any case an object choice the analysis plan fact - especially internal affair of the company on the basis of the purposes and the problems of budgeting set by her heads. Intra firm commercial budgeting as the administrative technology includes three components (tab. 11.4).

Table 11.4 - Components of intra firm budgeting

Elements of intra firm budgeting	Maintenance
Technology of budgeting	Includes tools of financial planning (types and formats of budgets, system of target indicators and standards), an order of consolidation of budgets of various levels of management and a functional purpose, etc.
Budgeting organization	Includes financial structure of the company (structure of the centers of the account - structural divisions or businesses of the enterprise or the company, being objects of budgeting), the budgetary regulations and mechanisms of the budgetary control (procedure of drawing up budgets, their representation, coordination and the statement, an order of the subsequent adjustment, collecting and data processing about performance of budgets), distribution of functions in management personnel (between functional services and structural divisions of various level) in the course of budgeting, system of internal normative documents (provisions, duty regulations, etc.)
Automation of financial calculations	Provides not only drawing up financial forecasts (including the scenario analysis, calculation of various options of a financial condition of the enterprise and its separate types of businesses), but also statement of so-called continuous management accounting within which at any time it is possible to receive operational information about course of execution of earlier adopted (approved) budgets (about cash flow, level of expenses, prime cost structure, norm and mass of profit, etc.) moreover by separate types of economic activity of the enterprise or its structural divisions (by types of products, under separate contracts, on branches or subsidiaries, etc.), and not just for the legal entity as a whole

Statement of intra firm commercial budgeting can be a success only at complex interaction of its components. In RK while there is no accurate interrelation of budgeting as administrative technology (from methodical providing to system of organizational and administrative documentation) and the software on automation of financial planning. Many computer programs on statement the budgetings which have been carried out by leading Russian consulting firms, remain not ready products for use as they can't be used without the corresponding adjustments taking into account specifics of the organizations. Attempts of heads of the Russian enterprises to buy powerful computer system of the R3 type of the German firm SAP take place also, and then on its basis to construct system of intra firm budgeting. In spite of the fact that the specified system is suitable for statement of intra firm budgeting better, is used at the largest and richest enterprises of Russia, takes root for about 7-8 years some of them already, examples of successful implementation of projects of intra firm budgeting on its basis are still unknown. At statement of intra firm budgeting it is necessary to involve three sources:

- methodology of budgeting which is based on the western principles of financial management;

- creation of the corporate databases based on collecting and processing of primary documentation, including all information circulating in accounting reports for representation of approved forms of accounting reports in tax authorities;

- strict following to the principles of confidentiality.

Statement of budgeting assumes a certain sequence of actions (tab. 11.5)

Table 11.5 - Stages of statement of budgeting

№	Budgeting stages
1	Studying of methodology of budgeting
2	Definition of the purposes, tasks, objects and the principles of budgeting in the company
3	Automation registration and analytical ensuring budgeting
4	Automation of process of budgeting
5	Audit of estimated indicators
6	Definition of types of budgets
7	Definition of the budgetary formats
8	Approval of the budgetary regulations
9	Distribution of functions in management personnel
10	Document flow scheduling
11	Intra firm expeditious control of performance of budgets
12	Audit of estimated indicators

Standard basis for development of financial plans are budgets of the current activity (operational budgets): 1) budget of sales; 2) budget of stocks; 3) production budget; 4) budget of requirements for materials; 5) the budget of a factor cost on compensation; 6) budget of gener...