The budget and the planning in the companies; requirements for its preparation // Part II
The commercial market of today is very dynamic and fluctuating, this demands that companies are in constant financial control and in particular, have reconciled their inventory of goods and products. Of course, if the company has within its objectives to remain as a leader in the market. We know that with the current economic crisis that exists in the country, this task is not easy. It is there that the technique or tool of the budget takes strength and reference, since it allows to minimize the risks in the transactions or operations of the organization, guaranteeing the permanence of the plans of the company within reasonable limits.
Companies to deal with this industrialized world, which is observed to take giant steps on a par with technology, it is essential to take preventive measures, to anticipate the facts and admit to solve potential problems. In this sense, the budget as an administrative tool is of relevance in the management of a company. In this technique, the line of command finds the necessary support to make the most appropriate decisions, by means of which the objectives will be efficiently achieved.
Now, through the budgets two elements of the nominal accounts can be determined, as well as the income and the expenses, that by their dynamic movements, let observe the financial situation of the organization at some future point in time. The systematic forecast supports the control situation, mainly in two aspects: First, when revealing the effects that will be obtained if the plans are put into practice, and in the second expression, they admit to evaluate the performance, showing the areas that require attention or action. corrective
Enunciating that a budget was successful, or that it was well done, does not mean that the results achieved were identical to those budgeted, but that there was an improvement in the company, achieving greater efficiency in the operation.
To achieve success in the preparation of budgets, with the highest percentage of satisfactory, the leaders in charge of its preparation must be based on certain requirements, which we explain below:
Notion of the Company.
Display of the plan or policy.
Coherence in the execution of the plan or policy.
Fixed period to budget.
Management and surveillance.
Support from managers
1. Notion of the Company
The success of a budget lies in the broad knowledge of the company owned by the people involved in the development of it, this in terms of its objectives, goals, rules and procedures, plus the policy, vision and mission of the entity. Hence, the budget, if not drawn up under the main characteristics of the company, the objectives have not been achieved and may fail. It is for that reason that the content and form of budgets varies from one company to another.
2. Exhibition of the plan or policy
The notion of the criteria of the line of command of the organization, in reference to the objectives that are to be achieved with the establishment of the budget, should be exposed in a clear and concrete way by means of manuals and instructions, whose purpose will be, in addition to the above, balance the work and coordinate the functions of the people in charge of the preparation and execution of the budget; define the responsibilities and limits of authority in each of them, as well as avoid particular or diverse opinions.
3. Coherence in the execution of the plan or policy
A member of the line of command should be delegated as budget director, to coordinate all the departments involved in the execution of the plan. All activities must be parameterized and synchronized under a calendar, where faithful compliance and development is demanded. This stage is known as: "activity schedule". And in it must be reflected various factors, such as: stability or instability of the company's operations, the period of the production process, market trends, seasonal sales, among others.
4. Fixed period to budget
Every budget depends on the type and condition of the company, its objectives, form and organization, and its requirements; the content and form vary from one company or organization to another, especially in the degree of analysis required, therefore, according to its exploitation system, its main objective, its mission and vision, the budgetary period will be established in these terms , which is usually a calendar year, but not necessarily a straitjacket, everything depends on your system and the line of command and its shareholders.
5. Management and surveillance
Once the plan has been approved, each department will receive the delegation to elaborate the corresponding budgets, with the instructions or recommendations that will help the supervisors to implement said plans. Subsequently, a detailed study of the differences arising from the comparison of the real data with the predetermined ones will be made, periodically evaluate the estimates and, if necessary, modify them according to the organization to which it belongs.
6. Support from managers
In a company everything that is regulated with prior authorization of its directors and shareholder is exposed as a full will for its implementation. So the budget is not alien to this opinion, therefore from its planning, development, execution and evaluation, must be supported by senior management and its line of command. Converting the budget into an operative action plan, and a pattern of measurement with the executed.