Budget Is A Tool For Future Work.

The core and foundation of effective budgets can often be summed up as such questions: what kind of results do we hope to derive from these important areas of activity? Budgets should not be simply deduced from past practice, and enterprises that simply extrapolated to the past will sooner or later get into trouble. Budgeting is and must be a statement of future intentions.

　　 budget It is a tool that enables every business to be very clear, linking these things, including long-term planning, blueprint, strategy, creativity and innovation, to integrate and summarize, while removing those irrelevant factors from enterprises and reconfiguring resources. Every work must be guided by the following question: what measures should we take to achieve these intentions at the next stage?

People often use monetary units to make budgets. currency This has led to some widely erroneous views.

We should just take it. Amount of funds As a form of "simple expression" of actual quantity, therefore, as long as the actual quantity is unchanged, the adjustment of the amount of funds will not have any effect on the final result.

A good financial budget requires us to consider the expected results and the necessary measures and measures comprehensively, carefully and responsibly.

If the budget is only regarded as a tool for cost control, it is unlikely to produce results. Most employees will find that the budget is unreasonable and bureaucratic, and it will even become an obstacle. A more important function of the budget is to analyze the source and causes of costs, to refine expenses, and to control resource utilization and organizational priorities mentioned above.

In order to reduce the risk and naive behavior in the budget process based on past past actions and force employees to take careful consideration of all activities, it is necessary to start budgeting for a certain activity area from time to time. It enables us to get rid of the constraints of previous restrictions, practices and conditions.

Although this work is time-consuming and difficult, it is well worth doing. Therefore, we should choose the zero base budget frequently, and do not need to cover every activity in a year. We only need to do one activity in a longer interval. More importantly, continuous budgeting should be adopted for key activities related to success or failure.

The worst case varies from enterprise to company. One way is simple and crude, but very effective. If we have to face a 30% drop in sales, what will happen to the company? Sometimes people think it's too much. How could such things happen? In 1990s, people realized that this situation could happen, whether it was caused by the economic environment or the progress of science and technology.