Enterprise Budget Management Improvement

Budget management is an important management control mechanism of the enterprise. Meanwhile, it is the important tool to implement the overall management and insure the realization of strategic targets of enterprises. Extensively applied, budget management is a necessary management routine of most western enterprise. In our country, there are more and more enterprises to adopt budget management method actively. However, afterward of 1990's, as the economic environment changed, budgeting appeared disordered in practice ,for example , it can not implement the strategic intention of the organization, it is difficult to achieve the optimal collocation of the resources, it encourages the managers to manipulate the budget. So the role of budget management in enterprise is oppugned, and even be considered as the obstacle of enterprise's value maximization. This study considers that the root of these problems lies in that the traditional budgeting can not be adequate to the current demand of the enterprise management. Formed in the industrial economic era, the basic mode of the budgeting reflected the specific business environment, organization mode of enterprise, and the requirements of technique conditions to management control in that time and the response of enterprises to these. However, the economic environment changed dramatically nowadays, while the traditional budgeting conception and mode is continued to be used almost invariably, which results in that the budgeting can not exert its function. On the other hand, the new types of control mechanisms, such as the Activity-Based Budget (ABB), the Kaizen Budget and the Balanced Score Card (BSC), emerged to satisfy the demand of the enterprise management. These mechanisms improve the budgeting or even are the substitute of it at some aspects, and provide new management control concept and methods to improve the budget management .However; they can not replace the budget management thoroughly. So this study suggests combining the budgeting and the latest management control methods to put forward a new way to improve the budgeting management. The improved budgeting is an integrated system that based on Activity-Based Budget (ABB), the Kaizen Budget and the Balanced Score Card.The integrated budgeting management system improves budgeting in four ways, that is the strategy management, the identification of the value driving, the collocation of the resources and financial plan and the performance measurement and evaluation. It really carries out the organic combination of the enterprise strategy, the operation process control, the budget management and the performance evaluation. The advantage of the improved budgeting system lies in that it can insure the budgetary target be in accordance with the strategic target, helps to resolve the haggle in the budget and the manipulation of the budget, makes budget management becoming real overall management, helps to carry out the whole member participation and stir up the employee's enthusiasm and helps to actualize the dynamic management control.The article is divided into six parts. The first part is an introduction which introduces the background, meaning and the perspective of the research. The second part is the overview of the budget management which explains the function and importance of budget management in carrying out of organization's target. The third part analyzes the problems of traditional budgeting and the motivation of change. The fourth part discusses the thinking and the suggestions about the improvement of the budget management in detail. The fifth part discusses the actuality of budgeting practice and the foreground of improved budgeting in our country's enterprises. The sixth part is the conclusion part which concludes what we discussed before and points out the innovation and limitation of this article.