Managing the achievement of financial objectives
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The analysis of the company’s financial indicators is an important element of the company management. Do not wait for the appearance of actual data – manage it.
Managers often see budgeting as a means to control funds or expenses. In fact, budgeting is a powerful tool for managing an organization.
Budgeting helps to achieve the following objectives:
- To coordinate the activities of all the company’s subdivisions due to the calculation and monitoring of achievement of interrelated financial indicators with determining the KPI of each employee separately.
- To delegate the responsibility to the managers, which allows to reduce the burden lying on the TOP-management.
- To determine the contribution of each subdivision into the achievement of the company’s financial result.
- To optimally distribute the company’s resources according to the strategic aims, i.e. to make its activities effective and rational.
- To manage the company’s activities on a daily basis, in real time – till the appearance of the final results.
The effect of the proper use of budgeting often exceeds the expectation. The practice shows, that after the successful implementation of a budgeting system the enterprise substantially increases its profitability, financial stability and competitive ability, and the existence of personal responsibility of the company’s management leads to the appearance of the financial discipline.
The secrets of successful use of a budgeting system
- At the implementation stage
- Unification of normative-reference information in the Management accounting policy of the enterprise.
- Development of a detailed financial budgeting model.
- Choosing a software product, that will be suitable for solving both the current and the perspective tasks, taking into account the minimal consumption of time and resources.
- Mindful and active participation of the managers of all levels in the project of developing a model and implementation of a software solution.
- At the exploitation stage
- To develop and to strictly require from al the managers the compliance with the regulations regarding the budget planning.
- To make the motivation system and the attestation of the heads of the subdivisions dependent on the results of the budget implementation.
- To promptly uncover the departures from the plan, to make adjustments and to apply management pressure.
- While choosing software we recommend that you look through several products, which will allow you to pick the software most suitable for the enterprise’s specific needs and the objectives that are to be achieved. The choice of software should be made with the help of a consultant with good knowledge of software products and the specifics of their application.
- A budgeting financial model is necessary for the correct adjustment of the software product. It should be developed with the help of the consultant, that has experience in developing methodological models and good knowledge of the software product.
- Budgeting regulations are necessary for the successful implementation of the automated system. This document will give the participants of the budgeting process the idea of the budgeting model and also their role and responsibility in this process.
Budgeting with BIT.FINANCE: effective fight against needless expenses
First Bit Company offers a range of BIT.FINANCE products for automation of budgeting and management accounting in a company. The implementation of these products ensures:
- setting up management accounting adapted for the enterprise’s needs from scratch (this is the basis for the further implementation of budgeting);
- administration, control of the current state and the implementation of the budgets of different levels in the company;
- conducting plan-factor analysis according to certain budget items;
- detailed examinations of the sources of expenses, search for reserves for their minimization;
- convenient interface, possibility of graph and table representation of data and creation of analytical panels of indicators for each manager individually.
To learn more about the interface and functionality of BIT.Finance system, we are ready to offer you its demo-version.
Should you have any questions about the system’s functioning or the questions of methodological character – do not hesitate to contact us! Highly qualified and experiences specialists of First Bit's International Department are always ready to give you comprehensive answers to all your questions!