Analyzing The Current Situation Of Budget Management In China From The Practical Level

Small businesses are not fully aware of the scientific nature of the overall budget.

In the face of the harsh reality that the market dominates enterprises, large enterprises are exposed to the deficiencies of production centered business plans. Therefore, it is more urgent for large enterprises to carry out comprehensive budgets, and large enterprises also have enough manpower, material and financial resources to carry out this work.

For them, because of the large amount of cash flow, the overall budget revenue is greater than the cost.

On the one hand, small enterprises have insufficient understanding of enterprise leaders. On the other hand, the actual production and operation of enterprises are relatively simple, and the resources of manpower, material resources and financial resources are all restricted. The implementation of comprehensive budgets lacks necessary conditions and power, and accordingly, a scientific conclusion can not be reached for the scientificity of the budget.

There are two kinds of functions of budget in theory: decision management and decision control.

In practice, budgeting is often used as a tool to control costs, ignoring other functions.

The budgets of production, sales and expenses have been generally compiled by enterprises, and the budgeting of capital expenditures and the compilation of the balance sheet, profit and loss statement and cash flow budgets have not attracted the attention of enterprises. This shows that the support function of the enterprise budget for the implementation of the maximum value strategy is biased.

First, financial indicators can not fully and accurately interpret the value objectives of enterprises, thereby weakening the management value function of the budget.

The two is to link the budgetary goals with the performance evaluation indicators of the accounting nature, so that managers can not hesitate to adopt the various methods of earnings management in order to achieve their budgetary goals.

In the organization of budgeting, a considerable number of enterprises in China still do not have specialized budgetary management organizations.

With regard to the types of budgeting, enterprises have generally compiled a budget for sales and management expenses, and the budgeting of capital expenditure and balance sheet, profit and loss statement and cash flow budgeting have not attracted the attention of enterprises.

With regard to budgeting, most enterprises have accepted the idea that the comprehensive budget should be based on the market, but many enterprises still focus on internal production when budgeting.

This makes the budget management unable to adapt to the pient changes.

On this basis, the correctness of production and sale decisions is greatly limited.

We began to pay attention to the effect of budgetary control, but we still did not pay enough attention to the incentive function of budget.

As for budgetary adjustment, enterprises have no obvious influence on the enthusiasm of employees, which is a manifestation of the failure of budgetary incentives.

It is possible to achieve the goal of establishing advanced nature and achieving a certain degree of effort.

On the one hand, it can form a mental power. On the other hand, encouraging the reward of achieving the goal (or failing to fulfill the target will be punished) will form a material motive force.

This will stimulate the staff to improve their ability and give full play to their potentials so as to improve their production efficiency as a whole. This is the incentive function of the budget.

However, in the existing budget management practice, this positive effect has not been brought into full play.

To sum up, Chinese enterprises' understanding of comprehensive budget management deviate from the wrong choice of budget objectives, the lack of understanding of the scientific nature of comprehensive budget management and the recognition of budget functions. In practice, they fail to grasp the essence of comprehensive budget management, which is manifested in incomplete and inaccurate budget indicators, lack of specialized budget management agencies, decentralization of budgetary decision-making authority, single budget compilation, budgeting from internal production, inadequate budget monitoring, and inadequate staff incentives.

It can be seen that there is still a long way to go for Chinese enterprises to carry out comprehensive budget management.