Budget management is to properly calculate the created budget, summarize it as a numerical value, and adjust the plan by comparing it with the actual results.
However, there are many people who do not know the specific content and purpose.
So what is budget control? We will explain in detail the outline, the points necessary for efficiency, and the actual system!
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- I want to know about budgets and budget management in an easy-to-understand manner
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Table of Contents
- What is budget control?
- Reasons and Benefits for Budget Control
- Overall sharing of specific numerical targets
- Efficient allocation of management resources
- Management stabilization
- Key points for efficiency
- Appointment of budget control personnel with appropriate knowledge and skills
- Utilization of budget control system
- Budget control system introduction
- Workday Adaptive Planning
What is budget control?
Budget management is one of business management, and it is to quantify achievement targets and manage them appropriately in order to generate profits for a company.
Companies set short-term, medium-term, and long-term goals, and prepare budgets in line with financial results. Budgets are also called “sales targets” and “profit targets” and are divided into four types depending on the target.
- sales budget
indicators for profit. sales target
- cost budget
Estimation of raw materials required to provide products and services
- expense budget
Estimation of costs necessary for continuous business activities (personnel costs and advertising costs)
- profit budget
Company profit after deducting costs and expenses from sales
There are two ways to create a budget: top-down and bottom-up.
- top down
Method of giving instructions to subordinate organizations based on decisions made by upper management such as management plans
- bottom up
A method in which decisions are made by making proposals from the field to upper management Since
it is difficult to create an effective plan with only one of them, a budgeting method that combines both is generally adopted.
The general flow of budget control is shown in the diagram below.
First of all, we start with the proposal of the budget policy, and the budget compilation department decides the specific policy.
After creating the budget proposals for each department, the budget compilation department compiles the budget proposals for each department to create a comprehensive plan.
Reasons and Benefits for Budget Control
Overall sharing of specific numerical targets
If we only formulate management policies, we will not be able to achieve our goals as a company without a clear path to achieving them.
Therefore, if the management plan is quantified as a budget, not only the goals of the company as a whole, but also the achievement goals of the actual departments will be clarified, which will improve the motivation of employees.
Efficient allocation of management resources
Management resources are finite, and analysis of how much budget to spend on which field is necessary for the continuation of the company.
Reviewing the management plan and efficiently distributing management resources will bring further corporate profits.
Appropriate budget management helps prevent corporate losses from increasing.
By improving processes to achieve goals and early detection of problems, we can prevent major damage and stabilize the management of the company as a whole.
Key points for efficiency
Appointment of budget control personnel with appropriate knowledge and skills
The biggest goal of budget management is the achievement of the company’s business plan.
Accounting knowledge above a certain level is required when creating a budget or scrutinizing the budget submitted by each department.
In addition, it is necessary to have the ability to see the entire company and make comprehensive decisions, and the communication skills to communicate smoothly with each department.
Utilization of budget control system
If you introduce a budget control system, you can reduce the time and effort required to collect information in Excel when compiling a budget, and reduce errors due to manual entry.
In addition, you can compare and analyze the budget and progress results on a daily basis, and by continuing this cycle, the quality of budget management and organization will improve.
Budget control system introduction
Budget management requires a lot of man-hours because it is necessary to pick up and aggregate information from each department.
For feasible and speedy budget management, it is necessary to identify and introduce a budget management system suitable for your company.
This time, we will introduce three carefully selected services.
While taking advantage of Excel’s extremely convenient input interface and flexible and easy-to-use tabulation and analysis functions, it eliminates the disadvantages in terms of information sharing and information preservation.
Not only based on accounting items, but also covers a wide range of upstream detailed planning, budget performance comparison, and data analysis.
- Information gathering
Timely and accurate collection of information necessary for management decisions from many physically separated sites with different languages and currencies
Aggregate and process the collected information to the required granularity for each layer
Supports quick and accurate management decisions by visualizing information such as aggregated and processed numerical data in forms, reports, and graph charts
Equipped with a wealth of functions such as external system linkage
Workday Adaptive Planning
Coordinated management with Excel supports a wide range of operations from budget compilation to budget/actual management/management accounting, PL/BS/CF
- Report breakdown function
Intuitive understanding of complex data transitions with breakdown and multi-dimensional form creation functions. Breakdowns can be checked by clicking on the spot, and various forms can be created by dragging and dropping.
- Input function
A user interface similar to Excel enables stress-free operation and reduces the burden on the person in charge.
- Link function with Excel
It has the ability to import and export Excel and CSV data. With this function, it is possible to link with existing ERP/core systems and to transfer data
Various other functions such as detailed data management are installed.
Supports information gathering work with Excel-like operability and high maintainability. We provide a wealth of standard functions that provide total support for the requirements necessary for budget management and consolidated business management, as well as a highly versatile data collection platform.
- Consolidated accounting
Provides statutory consolidation functions that comply with the latest accounting standards. It also supports management and consolidation operations such as monthly consolidation, consolidated budgets, and consolidated forecasts, and can be used as a consolidated management base.
- management accounting
Effective in business management applications such as profit and loss management by product, unit budget management, capital investment management, etc.
- Group management data collection platform
It can also be used as a base for collecting information from group companies. Centralized management of various data necessary for group management, such as BEPS-related information, group personnel information, store information, etc.
Equipped with abundant functions such as IFRS support
This time we are talking about budget management.
Let’s improve the efficiency of budget management by reviewing the flow and utilizing tools.