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Budget of Costs as a Planning and Control of the Company

Updated on October 7, 2016
Image by: Portal Educacao
Image by: Portal Educacao | Source

Operational research applied in the planning and business control

Entrepreneurs are increasingly eager for tools that support the management of a company, particularly with regard to the financial sector. Current data in Brazil shows that micro and small businesses are primarily responsible for maintaining positive job creation in the country in the first half. Luis Barreto, chairman of SEBRAE, in a radio interview "Band News FM", says the micro and small enterprises accounted for 76% of all jobs created in the first half of 2012 The service sector is the great promise of this result.

This means that companies are planning more, financially, their endeavors. In turn, are concerned with the planning and budgetary control of the same. What is it about the cost budget? This is a guidance document on the relationship of budget planning with fitness costs. Cost budget is a tool for planning and control of the enterprise. He leaves the behavior of the past and look to possible future changes, quantifying in economic and financial terms, the company's activities. This is a prediction, a goal, according to which decisions costing of production must be taken.

The budget as a planning tool, allows the entrepreneur to keep spending down to their business objectives and has a parameter of comparison to check for possible deviations before it's too late. The instrument serves to advise on all aspects of budgeting and its relationship with the company's costs. The cost budget integrates operational and financial aspects, aiming at setting objectives, policies and strategies, harmonize the goals of the company shares, quantify the activities and their dates of completion, improving evaluation and resource utilization. It also serves to communicate to owners and managers, the intentions and achievements of the Company and to enable them to assess whether the company's reality conforms to what they want it.
In fact, the cost budget is the first step to monitor the adequacy of the company's costs to your goals and abilities. The tool is used from some clarification, in order to enable a better understanding of the subject, also guiding to a more appropriate way of dealing with the issue. To create a budget cost, you must first lift the uses and applications in the business process, ie, its costs, expenses and investments. The classification of costs and expenses should take into account the management needs of each company to respond to questions from the administrator to decision making.

Management planning process and business costs


The budget planning process adds value to the activities of the company in that it makes everyone involved in the business think and realize the economic results that can be generated. More important than the budget is the budget process itself. No budget, by itself, can ensure that the projected costs will be achieved. So that the budget is met it takes discipline in budget execution and it depends on the attitude of the entrepreneur and business administrator, monitoring and evaluation of results and deviations. The script to do the budgeting, monitoring the results of the company can follow as follows:

- Systematic registration company transactions through the accounting;
- Compare the budgeted performed with identifying variations;
- Analyze and understand the causes of variations;
- Adopt corrective action when variances are controllable and can impact negatively on the business;
- Review the budget always understand that the goals and objectives need to be changed due to circumstances beyond your control or threats and opportunities that arise in the environment.



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What is the importance of Operational Research?

Operations Research (OR) is an activity with applicability and practice to management problems, including those that arise quite complex from planning to production control. At the same time, due in part to the very fact of being complex problems arise when seeking to adapt it to business activities, problems concerning the organization, labor relations and qualifications of team operations.

Usually the OR team is divided into two parts: first, a relatively small permanent support of professionals, experts in labor OR, second, a rotating advising managers on potential recruits in the functional sections of the company. It is essential that personnel selected for the OR to be able to bring to the company outstanding technical ability.

The following steps describe the basic process of budget planning costs:

Based on the expected sales volume, calculate the cost of goods sold products (industry), the cost of goods sold (trade) or the cost of services (services), with direct inputs, labor, direct labor etc. It is important to predict if expected inflation in the cost items, so you can properly design the spending on production, marketing and service. Determine the volume of current expenditure, taking into account the cost of sales, administrative and financial expenses. Based on estimates of revenues and costs, assess whether expansions are needed in current expenditure structure, such as more sales staff, rewards for achieving goals, spending on public services and etc.


BAND NEWS FM Radio. Jobs in Micro and Small Enterprises in the First Semester: Exclusive Interview with President SEBRAE. Daniela Florenzano. São Paulo, 2012.

SEBRAE Library. BUDGET COSTS: Instrument Management Support. 16.ed. São Paulo, 2004.


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