Financial Budgets Of Key Business Items

The prudent budget always faces such a dilemma: how much should we consider and consider budgetary entries?

Therefore, it is valuable to consider the following questions: does the budget item with a proportion of only 10% to 20% be an important item? What budget items do we really grasp, which will affect other items?

In general enterprises, Post Office There is little significance in making detailed budgets with telephone charges. However, in the enterprises engaged in mail order business, the cost and frequency of postal delivery are very important. Budget entries Now. For most companies, the use of space is not important. For supermarket chains, however, it is a key budget item.

In 1920, GM led by Alfred Sloan introduced the key item budget and was further improved in the US Department of defense in 1960s. In millions of budget entries, we have only found hundreds of really important entries.

By the way, the key entry financial budget It is also the basis for proper application of exception management. Although we seldom talk about exception management these years, this does not mean that it is of little use.

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No matter how to prepare the budget in the end, and no matter what form of budget it takes, only people, that is, only individuals, can actually complete the work. Although people often say that people are the most important resources, we often neglect this. Money spent on employees (personnel costs) is subject to budget, but employee performance is not the case.

After the final analysis, only one resource can create performance, that is, people. Like other parts of the book, we do not refer to people in general, but to employees.

If there is no name of the person attached to the budget (the name is the name of the person in charge), it will not be effective. If possible, every budget item should be specific to the person. The core issue that should be concerned here is: whose work is this, what is the expected result and what is his responsibility?

The most important tool in this area is task control. We have analyzed this tool in the preceding chapters of this article. Therefore, our budget arrangement is mainly not cost, but everyone's advantage. This is the only way to ensure that the work is carried out and the final implementation is successful.