Budgeting as a tool for planning and managing business activities of the enterprise

Abstract

The article highlights the theoretical approaches to the essence of the concept of "budgeting" as a tool for managing economic activity of the enterprise. Based on the study of interpretations of the "budgeting" concept, a comparison of opinions of different scientists-researchers of this economic category is generalized and formed. The role of budgeting and opportunities for effective management of economic activity of the enterprise are revealed. The principles on which the budgeting system is based are analyzed and supplemented by their own, which include: optimality; unity; systematics, transparency, alternatives, complexity. The classification of budgeting methods is carried out according to the following classification features: selection of budget planning objects, initial base, budget development procedure, level of centralization, level of adaptation of budget planning to changes in the external environment, method of planned budget indicators calculating. It is determined that budgeting as well as any economic category has its advantages and disadvantages, the main of which are given in this article.

Modern business conditions necessitate entrepreneurs to take into account changes in both internal and external environment, actively master innovative management technologies, study market conditions, take into account the probability of certain events and at the same time develop models of enterprise behavior in the absence of sustainable development in labor, material, information and financial resources.

A significant number of business representatives appreciated the benefits of applying the budgeting process in practice, which is one of the management tools and has become widespread in economically developed countries. Budgeting is not a universal method of avoiding negative impact on the results of their activities, but provides an opportunity to navigate in a real fast-changing environment and make the necessary sound management decisions that will provide optimal conditions for business development in an unstable economy. The practical application of budgeting becomes an objective necessity, as it helps to optimize resource flows, ensures economical use of all types of resources, affects cash flow management, increases financial discipline, the level of investment attractiveness and competitiveness of enterprises.