Cash flow budget items

Income and Expenditure Budget Items

Name

1. Income from core activities

1.1. Income from the sale of goods

1.2. Income from the sale of services

1.3. Income from the sale of products

2. Direct production costs

2.1. Direct material costs

2.2. Wages of key production workers

3. Overhead

3.1. Salary of administrative and managerial personnel

3.2. Administration salaries

3.3. Depreciation of general business fixed assets

3.4. Representation and travel expenses

4. Income from financial activities

4.1. Positive exchange rate and amount differences

4.2. Interest on deposits

4.3. Interest on loans issued

5. Expenses for financial activities

5.1. Negative exchange rate and amount differences

5.2. Payment for settlement and cash services

5.3. Interest on credits and loans received

6. Income from other activities

6.1. Penalties and fines received

7. Expenses for other activities

7.1. Penalties and fines paid

7.2. Compensation payments

Name

1. Income

1.1. Proceeds from operating activities

1.1.1. Proceeds from the sale of goods

1.1.2. Proceeds from the sale of services

1.1.3. Proceeds from the sale of products

1.2. Income from financial activities

1.2.1. Credits and loans

1.2.1. Interest on loans issued

1.3. Income from other activities

1.3.1. Fines and penalties received

2. Payouts

2.1. Payments for core activities

2.2.1. Raw materials

2.2.2. Wage

2.2.3. Accruals for wages

2.2.4. Equipment and intangible assets

2.2. Payments for financial activities

2.2.1. Repayment of credits and loans

2.2.2. Interest on loans and borrowings

2.3. Payments for other activities

2.3.1. Payment of penalties and fines

2.3.2. Compensation payments

Functional budgets allow you to manage a separate area of ​​the organization's activities, the boundaries of which are determined by the process model of activity. Budgeting is subject to processes that have an output measurable in physical or value terms. Items of functional budgets should correspond to items of consolidated budgets for proper consolidation of the financial result.

Distribution "Processes - functional budgets"

Functional budget	Process
Settlement budgets
1. Budget of settlements with suppliers
2. Budget for settlements with buyers
3. Payroll budget
4. Tax settlement budget
Natural-value budgets
1. Sales budget	A3 Promotion and sales
2. Budget leftovers finished products
3. The budget for the release of finished products
4. Production budget	A4 Production
5. Procurement budget	A2.1 Instrument reproduction

The operating budget is the budget of an individual Financial Responsibility Center (CRC). The purpose of drawing up an operating budget is planning and accounting for the results of business operations that are carried out by the corresponding CFD. In fact, the operating budget is a tool for delegating the powers and responsibilities of each CFD according to financial indicators assigned to it.

For each CFD, one (and only one!) Operational budget is drawn up. The total number of operating budgets at the enterprise is equal to the number of FRCs formed in it. So, in this quantitative ratio, respectively, the possibility of establishing a connection between the financial and budgetary structures is already visible.

For various financial responsibility centers that are engaged in similar activities, the content and, accordingly, the names of the articles and their groups of operating budgets may be the same.

An example can be Operating budgets for the center of income and expenses.

1. Revenue Center Budget "Business A"

1.1. Realization of the main products.

1.2. Finished products.

2. The budget of the income center "Business B".

2.1.1. Realization of the main products.

2.1.2. Services.

3. Budget cost center "Commerce".

3.1. Business expenses.

3.1.2. Salary of sales managers.

3.1.3. Sales commissions.

3.1.4. Fare.

4. Budget cost center "Marketing".

4.1. Business expenses.

4.1.6.1 Internet promotions.

Functional budgets

The economic activity of an enterprise can be represented as a set of certain functions. In general, the list of these functions can be represented as follows:

Sales;

Procurement;

Production;

Storage;

transportation;

Administration (management)

Financial activities;

Investment activities.

Articles of operating budgets, grouped on the basis of functional affiliation, form functional budgets. The purpose of compiling functional budgets is to determine the need for resources for various activities of the enterprise.

Each functional budget is compiled as a whole for the enterprise. So, the system of functional budgets of the enterprise forms its budgetary structure. Thus, Budget Structure - this is a system of functional budgets of the enterprise, in accordance with which there is a consistent planning and accounting of the results of its economic activity.

From the position of this definition, the core budgeting scheme certainly reflects the budget structure, since its blocks are nothing more than functional budgets.

A more detailed list of functional budgets, according to the above functions of the enterprise, can be considered as shown in Table. 5.6.

In table. 3.6 lists functional budgets at the top level. However, any of these budgets can be detailed in accordance with the needs of a particular enterprise. For example, if it makes sense for an enterprise to control not only production costs as a whole, but also their individual components, then Direct Manufacturing Cost Budget may in turn include Material budget, Energy budget, Depreciation budget etc.

Table 5.6

Example of a list of functional budgets

		Name of the budget
		sales budget
		Sales budget for own products
		Purchased Goods Sales Budget
		Fixed asset sales budget 03
		Sales budget for other activities
	The budget for the balance of finished products (GP) at the beginning of the period
	Budget for finished goods balances (FP) at the end of the period
	production budget
	Budget for work-in-progress (WP) balances at the beginning of the period
	Budget for work-in-progress (WP) balances at the end of the period
	Budget requirements for raw materials, materials, tools, etc.
	The budget of the balances of raw materials, materials, tools and others at the beginning of the period
	The budget of the balances of raw materials, materials, tools and others at the end of the period
	procurement budget
	The budget for the purchase of raw materials, materials, tools, etc.
	Goods Procurement Budget
	procurement budget
	The budget of goods balances at the beginning of the period
	The budget of goods balances at the end of the period
	Income budget for core activities
	Direct cost budget for core activities
	Direct Manufacturing Cost Budget
	Direct Selling Budget
	Overhead budget for core activities
	Manufacturing overhead budget
	Business overhead budget
	Administrative expenses budget
	Income budget for financial activities
	Financial Activity Expenses Budget
	Income budget for investment activities
	Income budget from other activities
	Budget for expenses for other activities

Budget type designations:

DV - income - expenses; RGK - cash flow; HB - naturally - cost.

If necessary, you can continue to drill down one more level when material cost budget detailed on raw material budget(including the main types are considered separately), Budget materials. The budget of components (again, highlighting the main types and (or) suppliers), etc.

On the basis of budget indicators, the final financial result is also formed: profit / loss or net cash flow (cash balance). The company can also create additional budgets- not to calculate the financial result, but to control functional areas in certain sections. For example, if you want to manage payroll costs across your entire enterprise, payroll budget, which it is advisable to consider separately, in the context of production, commercial and other expenses. However, in any situation, one should take into account the relationship between operating and functional budgets; for trade, they are schematically presented in Fig. 5.1.

Rice. 5.1. Relationship between operating and functional budgets

Let us characterize the Consolidated (Final) budgets of the enterprise. Each functional budget belongs to one of three types of budgets.

1. In-kind - cost (Budget of goods, stocks and non-current assets).

2. Budget of income and expenses (BDR).

3. Cash flow budget (BDDS).

According to this classification, functional budgets are summarized throughout the enterprise and form the corresponding final budgets. So, Direct Production Cost Budget, Overhead Budget, Selling Cost Budget, etc. are grouped and together form a final income and expenditure budget (BDR), a Operating Income Budget, Direct Production Cost Payments Budget, Overhead Payments Budget, Business Payments Budget, etc. - final Cash Flow Budget (BDBS).

Many enterprise operations affect all three of the resulting budgets. So, the sale of products will be displayed in the budget of goods, stocks and non-current assets as a shipment of finished products and, accordingly, basically, in the budget of income and expenses - as an accrual of income from sales, and when the buyer pays for this product in the cash flow budget (BDDS) - as cash receipts from sales. Consequently, the functional Sales Budget is compiled in the context of the movement of goods, income and money flow and, accordingly, takes part in the formation of all final budgets (Fig. 5.2).

Rice. 5.2 Relationship between functional sales budget and final budgets

Thus, the final budgets are necessary not only for planning financial results, but also for tracking "remote" and "side" effects of changing certain points in the strategy and tactics of the enterprise, as well as for reasonable adjustments to the budget as a whole. Let's consider them in more detail.

Income and Expenditure Budget (BDR) reflects the formation of the economic results of the enterprise. The purpose of its compilation is to manage the economic results of the enterprise, that is, its profit and profitability. Under the economic results in this case we understand the result of the production and financial activities of the enterprise, reflecting the change in the value of the property of the enterprise. He shows:

Enterprise income - in total and (or) detailed according to one or another criterion (CFD, source of receipt, etc.);

The expenses of the enterprise in the total volume and (or) are detailed according to one or another criterion (CFD, direction of expenses, costing item, etc.);

The difference (i.e. profit or loss) between income and expenses for a given period.

Based on these data, using certain analysis tools (primarily factorial analysis of profits), you can:

Develop a planned volume and determine the value of each source of income in the total volume of both income and profit. Such information is necessary for the development of the company's marketing policy, its production program, and the like;

Identify cost items that it makes sense to influence in order to improve financial results (identify cost items that have savings reserves).

The format of the budget of income and expenses (sequence and grouping of items) must comply with the format adopted by the enterprise profit and loss statement (Report on total income) , since this correspondence will make it possible to qualitatively plan and take into account the entire process of forming the financial results of the enterprise (Table 5.7). To ensure comparability, it is convenient to use the same format. The results obtained according to the plan, or in fact, do not need to be regrouped, listed, or corrected.

Table B. 7

Scheme of formation of financial results

day off index	adjustment		result
	Action ("-" - subtraction, "+" - addition)	Name of indicator
Operating income		Direct production costs	margin
		Direct selling expenses
margin		Business overhead	Cost contribution
Coverage contribution		Enterprise overhead	Profit from operating activities
profit from basic activities		Income from financial activities	Profit before tax
		Financing expenses
		Other income
		other expenses
Profit before tax			Net profit
Net profit		Contributions to enterprise funds	Unallocated
	dividends

On the basis of a single format, it can be argued that the BDT - just like in the Statement of Financial Performance - involves sequential, step by step, deductions from the gross financial results (revenue, marginal income, etc.) of the relevant expense items. So, according to the results of such a deduction of expenses, financial results “cleared” from a certain part of the expenses are formed at each step. And if at the first stage marginal income is formed as the difference between total income and cost, then at the last stage we get net profit.

In some cases, it is advisable to introduce additional lines "Financial result from financial activities" and "Financial result from other business operations", which will improve the management of their financial results.

Cash flow budget (CDBS) reflects the movement of funds (cash flows) for all types of bank accounts, cash desks and other places of storage of the enterprise's funds.

According to the direction, cash flows are divided into two types:

Receipts to the enterprise (cash receipts to the enterprise);

Payments by the enterprise (payments by the enterprise).

The difference between input cash flows (receipt) and output cash flows (payments) determines the net cash flow of the enterprise, which can be both positive when the company accumulates temporarily free cash, and negative when cash payments exceed receipts. There is a correspondence between receipts and incomes, as well as between payments and expenses. The formation of the majority of income and expenses is associated with the receipt and payment of funds. The level of detail of the BDDS and BDR articles should be the same. An example of the correspondence between articles BDDS and BDR is presented in Table. 5.8.

Table 5.8

Correspondence of articles BDDS and BDR

This correspondence provokes an equal sign between profit and net cash flow. However, even the beginning entrepreneur is aware that there are quite significant differences between them. The main reasons that cause differences between income and receipts or between costs and payments are:

1) differences in terms. Receipts in time may lag behind incomes, or may be ahead of them, in some cases they may coincide. The same thing happens with payments. They can be carried out synchronously with expenses, they can be ahead of them, or they can lag significantly behind - sometimes quite significantly;

2) differences in amounts. There are receipts that are not income and vice versa. An enterprise may receive income and not have receipts corresponding to these incomes. In relation to expenses / payments, there is a complete analogy: an enterprise can make expenses that do not require payments, and make payments that are not expenses from an accounting point of view.

Let's take a closer look at each discrepancy.

Differences in the lines in relation to income are as follows (Table 5.9).

Table 5.9

Line discrepancy with respect to income and receipts

Determining the relationship between BDT, BGRK and the balance sheet, it can be indicated that advance receipts form the company's accounts payable, and commercial (commodity) credit provided to customers - accounts receivable.

The difference in the lines in relation to expenses and payments is as follows (Table 5.10):

Table 5.10

Payment term in relation to expenses

In the balance sheet, advance payments are presented in accounts receivable, and commodity credit received from suppliers is accounts payable.

Disagreements in the amounts in relation to income are not so diverse: income from the main activity cannot be more than income. They can only be less due to losses associated with "bad faith" receivables. Consequently, in those enterprises where products (works, services) are sold exclusively for cash, receipts coincide with income both in terms and in volume. At enterprises that receive payment for products (works, services) in advance, the volume of income and receipts are the same, but receipts are formed earlier. At the same enterprises selling products mainly on terms of commercial(commodity) credit, receipts lag behind income both in terms and in amount. Nevertheless, as competition grows, commercial (commodity) credit will expand, and this type of income will become predominant.

The financial activity of an enterprise can generate receipts of funds that are not income, but are loans, as well as receipts that are not related to income, but are investments in the authorized capital of the enterprise and sponsorship (including budgetary).

Disagreements in amounts in relation to expenses are possible in both directions: as mentioned above, there are payments that are not expenses, and expenses that do not require payments. The main articles for which the EDV and BDDS differ from each other are given in Table. 5.11

Thus, BDDS is a mandatory tool for managing the cash flows of an enterprise. It is used to plan and analyze:

Volumes of specific payments and receipts;

Timing of payments and receipts of money;

Orientation of cash flows - receipts by sources, payments for their intended purpose;

Cash turnover for the period (with the required frequency), which is necessary to assess the need for additional financing;

The balance (balance) of funds on accounts for specific (control) dates.

All of the above allows you to manage the solvency of the enterprise, that is, its ability to repay obligations in a timely manner. This is achieved through the following measures:

Maintaining the required amount of funds on the account (for making all planned payments);

Table 5.11

Disagreements in articles between BDT and BDDS

There are several main approaches to budgeting:

1) budgets on the subject of management:

A) monetary (cash flow budgets - BDDS);

b) economic(income and expenditure budgets - BDR);

V) natural(in-kind value budgets - NSB);

2) budgets by units of measurement used:

A) cost:

- actual cost- reflect this or that value in monetary units, without reflecting money or cash flows as such ( BDR and balance sheet budget);

- monetary (BDDS);

b) in-kind value(work in progress budget at the beginning and end of the period);

3) budgets by level:

A) operating rooms (in the Central Federal District);

b) functional (in various fields of activity);

V) final (for the enterprise as a whole).

Operating budget- a budget that describes the business operations of a separate division of an enterprise that bears a certain financial responsibility; in fact, the operating budget is a tool for delegating authority and responsibility to each CFD for the financial indicators related to it. Each CFD corresponds to ONLY ONE operating budget, i.e., the total number of operating budgets in an enterprise is always equal to the number of FRCs formed in it.

Functional budget is a budget designed to determine the resource requirements for various areas of activity:

- sales(sales budget);

- purchases(budget of purchases of raw materials and materials);

- production(production budget);

- storage and transportation(budget of direct and overhead commercial expenses);

- administration (management)(budget of administrative expenses);

- financial activities(budget of income and expenses on financial activities);

- investment activities (budget of income from investment activities).

Functional budgets are formed by items of operating budgets, grouped according to the characteristics of functional affiliation(the relationship between operating and functional budgets is presented in table 3.1). The system of functional budgets, in accordance with which there is a consistent planning and accounting for the results of economic activity of the entire enterprise, is called budget structure.

Table 3.1 - Matrix of the most common relationships between operating and functional budgets

Functional budgets	CFD
Cost	Income	Marginal income	Arrived	Investments
1. Sales		+	+	+	+
2. Purchasing	+		+	+	+
3. Production	+		+	+	+
4. Storage	+		+	+	+
5. Transportation	+		+	+	+
6. Administration (management)	+			+	+
7.Financial activities	+	+		+	+
8. Investment activity	+	+		+	+

TO in-kind budgets include budgets for goods, inventories and non-current assets. They reflect the movement of all assets of the enterprise, except for cash. These budgets can be maintained both in monetary and natural units, while there should always be the possibility of replacing one unit of measure with another, if necessary. Characteristics of functional budgets by types of valuation are presented in table 3.2.

Table 3.2 - Characteristics of functional budgets by types of valuation

Obviously, each functional budget is related to to one of three types budgets:

1) NSB in the form of the budget of goods, stocks and non-current assets;

In accordance with this classification, functional budgets are consolidated and form the corresponding final budgets. For example, the direct production budget, the overhead budget, the selling expenses budget, etc., are grouped together to form the final BDR.

Thus, the objective function of the budgets of industrial enterprises includes the function of maximizing the final financial results, as well as a number of restrictions imposed by financial stability factors (3.1), (3.2):

KFR \u003d F (K1, K2, K3 ... H1, H2, H3 ...) - to the maximum,(3.1)

FS (L, FOC, SS…) >= FS (norm L, norm FOC, norm SS), (3.2)

where KFR - final financial results;

K1, K2, K3… - controlled external influences;

H1, H2, H3… - uncontrollable external influences (forecasted tendencies of the external conjuncture);

FS - the level of financial stability;

L, PSC, CC ... - factors of financial stability: liquidity (L), the amount of net working capital (NSC), the share of own funds in sources of financing (CC), etc.;

norm is the normative value of financial stability indicators.