The flow of funds (the concept of large cost) is realized through the flow of its extension (the external manifestation of funds - monetary funds, services or goods). As for the external form of funds as materials, there are two most basic attributes: quantity and value. In our FM budget management program, only its value is used as the target of budget control.
The flow of funds (the concept of large cost) can be divided into the flow between different accounting entities and the flow between different organizations within the same accounting entity according to the different choices of the reference system of the inflow and outflow entities. These two situations are a deepening, In the process of upgrading, the realization of the latter is carried out on the basis that the former has been effectively realized. We use the ERP management platform to carry out the flow of funds (big cost concept) for our budget management, and will also follow the different development stages and development processes of enterprise management to gradually deepen and refine. In the current FM promotion process, budget control is to control the business between different accounting entities, that is to say, capital (the concept of large cost) has occurred, and there is no change in the state of capital or capital occupation (economic nature). It flows within the same accounting entity and does not carry out budget control. For example, inventory transfer, cost allocation, cost reposting, etc.
The flow of capital (the concept of large cost) can be divided into operating capital flow, financing capital flow and investment capital flow. For the business between different accounting entities, if it is an operating capital flow, the budget control is carried out for the outflow business; if it is a financing capital flow, the budget control is carried out for the inflow; if it is an investment capital flow, no budget control is performed . The flow of operating funds between different accounting entities will ultimately be attributed to the acquisition behavior, no matter what form the acquisition behavior is reflected in in the ERP. If the business is reflected in the procurement module, it will be controlled in advance through the purchase application and purchase order links. If the business is not reflected in the procurement module, it will be "controlled" during (after the fact) in the debt confirmation (invoice processing) link. If the result of the financing action is not cash (broadly), no budget control is performed.
The flow of funds (the concept of large cost) within the same accounting entity is the flow of operating funds. If funds or the extension of funds are converted in the nature of occupation during the flow, it is necessary to carry out budget control over the inflow target of funds, but not to control the outflow of funds from the organization. Regarding the impact of the capital outflow organization on its own budget in the process of capital outflow, different treatment should be done according to different capital extension. If the extension of funds is monetary funds, it has no effect on the outgoing organization (the outgoing organization is an enterprise); if the extension of funds is in kind, the statistics are updated according to the principle of capital control for material procurement (see "Budget Control of Purchase Costs" below). The budget occupied by the outflow organization, that is, the available budget of the outflow organization, will not increase; if the extension of funds is services, the impact on the outflow organization of funds, that is, the organization providing labor services, is not reflected in the ERP system.
The object of budget control, in a broad sense, is the cost that has been or will be incurred. According to the different life cycle of the cost, there are three behaviors or states of increase, decrease and balance. The principle of budget control is to control the increase or balance of costs, and not to control the reduction of costs. For different cost objects, we control their different states, and the control implementation methods are also different. If the cost object carries the behavior of operating capital flow, control its increase; if the cost object carries the behavior of financing fund flow, control its balance.
The time point when the cost occurs is divided into about to occur, to occur and to have occurred. Budget control is carried out for the costs that are about to occur and the costs that are currently occurring. The cost that has already occurred is not controlled by budget, but is managed through the comparative analysis of the plan and the actual. During budget control, different cost object control time points are different. Take the cost of purchasing module (MRO/MM), take the control in advance, and take the control in the other.
On the basis of the above six points of budget control scope and principles, according to the type of business, we specifically design the following control principles and control methods:
(1) Budget control of procurement costs
For purchasing cost, we carry out increase behavior control, and the content of control is cost value. That is to say, regardless of whether the procurement object is materials or services, the procurement object is transferred from the procurement department (warehousing department) to other departments, the economic nature of the procurement object has also changed, and the available budget of the procurement cost will not follow the transfer of the procurement object. and increase.
If the purchase object is materials and there is a stock-in and out-stock behavior, the control method is implemented by designing the effect of out-stock behavior on the procurement cost consumption budget as statistical update (not participating in the calculation of budget availability control). If the purchase object is materials, but there is no in-out behavior or the purchase object is a service, the control method can be realized by adopting the same principle of "cost and expense budget control" according to the principle of immediate costing of the purchase object.
Purchasing cost control is based on the principle of prior control, which is controlled when purchasing requisitions and purchase orders are created. If the centralized procurement mode is adopted, budget control will be further carried out in the issue of materials. Different procurement projects have adopted budget control mechanisms.
(2) Budget control of costs and expenses
The budget control of cost (in a narrow sense, the cost incurred by the cost center) is carried out for the increase behavior. The content of the control is the value of the cost, and the time of the control is the event. There is no budget control for the transfer of materials in different storage locations within the enterprise and the allocation and apportionment of costs among different departments.
(3) Budget control of equipment maintenance business
Budget control of equipment maintenance costs is carried out for increasing behavior. The content of the control is the cost value, and the time of the control is the event. The settlement of maintenance costs (IO settlement or PM order settlement) is not subject to budget control.
The budget control of equipment maintenance costs is realized through the PM+FM module or IO+FM. For the purchase demand business generated by the equipment business, the budget control is carried out with reference to the purchase business.
(4) Fixed assets and investment budget control
The budget control of self-constructed fixed assets is carried out for the increase behavior. The content of control is the value of investment, and the timing of control is before or during the event. From orders to construction in progress, from construction in progress to fixed assets, budget control is not carried out.
For directly purchased fixed assets, if the purchase requisition and purchase order are passed, the ex-ante control is adopted; if the purchase requisition and purchase order are not passed, the in-process control is adopted.
No matter whether this type of business is realized through FM+IO+AA or through the control method of FM+PS+AA, FM only controls the total investment, and the details are realized in the budget management of IO or PS. AA only determines the impact of this type of business on the budget. The impact is: whether the investment value participates in the calculation of budget availability control.
(5) Budget control of production costs
Budget control is not performed on the business whose CO cost object is a production order (cost collector).
(6) Budget control of financing business
The budget control of the financing business is carried out for the balance, and the control time is in the event. The occurrence of financing leads to an increase in budget consumption, and the repayment of financing results in the release of budget consumption. The goal of maintaining budget data for this type of business is to ensure that the available budget for this type of indicator during the target accounting period is at a predetermined balance level.
(7) Budget control of sales revenue
There is no budget control for sales revenue, only the data generated by sales is updated, and a comparative analysis between actual and budget can be performed.