2022, Vol. 9, No. 1. - go to content...

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DOI: 10.15862/08ECOR122 (https://doi.org/10.15862/08ECOR122)

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Shevchenko T.A., Sharokhina S.V. Determination of the target function of the budgeting process as a factor in the effective management of working capital. Russian journal of resources, conservation and recycling. 2022; 9(1). Available at: https://resources.today/PDF/08ECOR122.pdf (in Russian). DOI: 10.15862/08ECOR122

Determination of the target function of the budgeting process as a factor in the effective management of working capital

Shevchenko Tatyana Anatolyevna
«Air Force Academy named after Professor N.E. Zhukovsky and Yu.A. Gagarin»
of the Ministry of Defense of the Russian Federation
Military Educational and Scientific Center of the Air Force
Syzran branch, Syzran, Russia
E-mail: privet7770@rambler.ru

Sharokhina Svetlana Vladimirovna
Samara State University of Economics
Syzran branch, Syzran, Russia
E-mail: sharokhinatv@gmail.com

Abstract. The article is devoted to the search for the optimal criterion of the objective function of the budget process, which would allow to show the possibilities of using budgeting as a tool for economic management in enterprises, taking into account their specifics. The authors try to answer the question of what should be taken as the final financial result of the budget process, that is, as a criterion for the target function of budgeting. The authors consider three assumptions about what should be taken as a criterion for management decisions for the current budget period: final financial results in absolute and relative terms, namely the amount of net profit for the budget period, profitability; indicator of economic value added, that is, the profit of the enterprise from ordinary activities without taxes, reduced by the amount of payment for all capital invested in the enterprise; balanced scorecard. Giving preference to the third criterion, the authors believe that the enterprise management system based on budgeting should be built in such a way as to combine all the performance indicators of the enterprise into a single system using a balanced scorecard so that a change in one indicator entails a change in all interrelated indicators, and thereby ensure functional and temporal communication at all levels of management. It is concluded that the main advantage of this criterion of the target budget function in comparison with the two previous ones is the absence of the need to assess the impact of management initiatives on the activities of the enterprise in the long term. It is enough to evaluate the potential indicators of the balanced scorecard in order to draw a conclusion about the positive or negative impact of the budget on the market position of the enterprise in the future period.

Keywords: budgeting; objective function; planning; working capital; management; budget process; budget period; financial result; financial stability

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