The life cycle of an enterprise is generally divided into start-up, growth and maturity.
Enterprises in different periods, the difference between its budget management:
1, start-up: focus on the capital budget. Enterprise start-up period of net cash flow is negative, the focus of budget management is capital investment, capital budgeting has become an effective means of controlling investment risk. But because many of the start-up period of the enterprise on the one hand too concerned about the market, on the other hand, also lack of attention to the budget, the lack of partners in the start-up team who understand the overall budget, resulting in a large amount of money burning, so that business start-ups are rarely successful.
2, the growth period: focus on sales budget. Growth period of the enterprise, the product is gradually recognized by consumers, the focus of business is often on expanding market share, sales situation is very good, but at the same time need to invest in a large number of sales costs and credit policies to attract customers (such as credit sales, installment payments). During this period, profit margins are higher, so companies have to supplement more working capital to expand sales, often increasing loans, and cash flow is still not enough.
The growth period of the enterprise, sales performance, profitability, and the management of the lag, is the introduction of comprehensive budget management of the best period. But the sudden high-speed development, senior managers will inevitably be the fruits of victory over the head, this stage, many of the problems of the enterprise are covered by the soaring performance, until the market is weak, the good old days are over, and then come back to solve the problem of the existence of the problem is too late.
So the growth period of the enterprise must seize the opportunity to quickly introduce comprehensive budget management, with the help of budget management system and performance control means to promote the upgrading of the product, enhance the level of the marketing team, the establishment of the budget management system as the basis for the operation of the financial management team, the implementation of a comprehensive budget as the core of the business management, to achieve the sales target.
3, maturity: the focus of attention is the cost of the budget. Mature period of the enterprise, product sales volume and prices tend to stabilize, rely on cost reduction to enhance profit margins, although the cash flow situation is better, the surface of the operational risk is lower, in fact, is breeding new risks. Enterprises to reduce risk.
The way to improve efficiency depends on two things: first, the life cycle of its own products and the performance of competing products; and second, the ability of the enterprise to control costs and expenses. The former is not controllable, but can not sit on the sidelines, you must invest heavily in research and development funds; the latter is controllable, but there is no effective means of budgetary control and the establishment of a standard cost control system, the enterprise is also sure to be difficult to move forward, and will soon be in a recessionary situation.
The maturity of the enterprise, like a big girl to be married, must be imported into the comprehensive budget management, there is no choice. Therefore, this stage of the comprehensive budget management system is not only become the core of financial management of cost control, more importantly, has become indispensable to solve the key problems of enterprise management control methods.