FLEXIBLE BUDGETING AS INSTRUMENT OF MANAGEMENT INDUSTRIAL ENTERPRISE

Abstract

In the conditions of developing market economy and need of increase of competitiveness the most important principle of effective management of activity of the enterprise is application of technology of budgeting. It should be considered not only as process of development and the organization of implementation of the main and operational budgets, but also as administrative technology.

One of features of the present stage of development of domestic economy is existence at the domestic industrial enterprises of reserves of capacities and, thereof, possibility of various options of their use depending on market condition. In these conditions as a preferable method of planning and management for the domestic industrial enterprises having reserves of capacities, the flexible budgeting consisting in establishment of ranges of a possible variation of key parameters with the subsequent correction of the related economic indicators can be recognized. The developed technique of formation of the flexible budget allows to define the expected and flexible budget, to compare in the course of the analysis actual data not only with expected, but also to the flexible budget and to receive more adequate assessment of result of activity of the enterprise and its separate divisions that promotes increase of efficiency of made administrative decisions.