Improvement of budgeting and operational control instruments

Abstract

A tool for conducting such an analysis, making effective management decisions on its basis is budgeting, most important strategic component of planning and analytical work of all spheres of economic activity is the development of regular financial plans - budgets. Article describe definition of budgeting and propose budget function in connection with main management functions, this allows us to determine the place of budgeting as an tool of development of innovative activities aimed at achieving the strategic and operational goals of the organization through the consistent implementation of management functions. Article overlining two fundamental approaches to the concept of budgeting. The first is - budgeting is a financial planning tool used to solve operational problems in a limited period of time. The second approach proposes to consider budgeting as a technology for managing an economic entity. Two common approaches to budgeting are: Base Plus: Many organizations simply take the actual data from the previous year and make arbitrary adjustments. Zero Based budget: This type of budget is required when base plus type fails, different type of companies organizations migrate to a "zero base” type of budget. As a result proposed different approach to budgeting processes, which can be applied and differentiation of budgeting techniques in dependency of area of application.