The Total Budget Management Based On Cost Design

Total budget management (TBM) is a modern business management instrument. It is playing more and more important role in the practice. With the integration of the funds, business and information, it can achieve the goal of allocating resources, carrying out strategy effectively, improving the level of management continuously and increasing the value steadily.Although TBM is applied more and more frequently by the enterprises of China, it also has a lot of shortcomings. The most important one is the standard cost as the base of TBM can't stand the overwhelming of market. This article will begin with the analysis the defect of TBM which bases on standard cost, then print out the shortcomings of the standard cost. As the same time, the article will introduce cost design as a method of cost control to illustrate the necessity of the combine of TBM and cost design.The article discusses a new pattern of TBM which called total budget management based on cost design. When I illustrate the circuit of how to make the budget management, I also use the circuit of traditional budget management. The article uses the material of cost design to establish the operating management budget, capital management budget and financial management budget. To follow the idea of "total life cost" of cost design, the new budget also contains the "customer cost". This new budget method isn't fitted for all enterprises because the using of cost design needs some conditions. Because cost design has a characteristic of "consistence low down the cost", the total budget must adjust the data in time.Because of limitation of words, this article only does initial research of how to control,promoting and evaluate the achievement of the enterprise base on TBM. It also uses a concept of "responsibility goal cost" as the standard of budget promoting, and utilizes a method called "cost rejection" as a method of promoting.