The latest budget book "Strategic Budgeting - The Industrial Revolution in Management" is excerpted as follows:

Modern strategic budgeting has the following characteristics:

1. Modern strategic budgeting is a system that covers all modules of human, financial, material, supply, production, and marketing. All personnel work in the same system, ensuring the integrity, comprehensiveness, and system of looking at problems, handling problems, and preventing problems. sex.

2． Modern strategic budgeting uses numbers to quantify various behaviors and results to be achieved, rather than expressing them in abstract concepts such as "loyalty", "reliability", "capability", etc. Here are quotes from famous people to reinforce the importance of understanding digital quantification.

“Only when you can use numbers to evaluate and express what you are talking about, you will have some understanding of it; if you cannot use numbers to evaluate and express what you are talking about, then you will only have a vague understanding of it. "(William Thompson)

"If you can't express what you know in numbers, you don't really know much; if you don't know much, you can't manage a business. "(Former GE CEO Welch)

3. Modern strategic budgeting is not an end in itself but a tool in the service of strategy.

The strategy of an enterprise is to seek advantages and avoid disadvantages, maximize strengths and avoid weaknesses, and ensure sustainable and healthy profits for investors. The purpose of enterprise budgeting is to achieve strategic goals.

4． Modern strategic budgeting is a dynamic operation throughout the entire process.

Modern strategic budgeting requires enterprises to decompose their goals into half-year, quarterly, monthly or even daily periods, and then standardize each effective action to flexibly execute and control the results to achieve the goals. Modern strategic budgeting specifically requires correcting a mistake often made by many private entrepreneurs, that is, only the results and not the process should be corrected. Modern strategic budgeting places special emphasis on the process, and it is a very clear process, because modern strategic budgeting believes that if the process is ineffective and has no plans and steps, then the results will inevitably not be perfect.

5. Modern strategic budgets can fully reflect the interests of everyone involved. Only by playing games with each other can we restrict and promote each other.

For example, the sales price of company A's products is calculated based on cost plus. If the purchasing department does not control the purchasing price well, it will force the sales price to increase, and the pressure on the sales department will increase. The product may not be sold due to the price increase, the sales volume will be reduced, and the salesperson's profits will also be reduced. Now assume that the commission of company A's sales staff is equal to the sales amount multiplied by a certain ratio. The sales staff may still get some comfort because the sales volume has decreased, but the sales amount may not have decreased, and the sales staff's interests have not decreased, or even increased. (Although this process is very difficult). Now assuming that the commission ratio is 1% of sales, the calculation results are as follows (unit: yuan):

Sales unit price unit cost unit gross profit sales quantity sales amount sales staff commission

Before price increase 100.00 80.00 20.00 9,600.00 960,000.00 9,600.00

After price increase 120.00 100.00 20.00 8,000.00 960,000.00 9,600.00

However, the company evaluates the performance of sales personnel based on Sales gross profit is calculated, so before and after the price increase The sales staff commission is completely different. Assuming that the commission ratio is 5% of the gross sales profit, the calculation results are as follows (unit: yuan):

Sales unit price unit cost unit gross profit sales quantity sales gross profit sales staff commission

Before price increase 100.00 80.00 20.00 9,600.00 192,000.00 9,600.00

After price increase 120.00 100.00 20.00 8,000.00 160,000.00 8,000.00

As listed in the table above In this case, the salesperson’s The benefits are significantly reduced. Because the purchasing staff failed to control the purchase unit price, but passed the risk to the sales department, the sales department would inevitably fight back and engage in a game with the purchasing staff. The results after the game would often tend to be rational. Purchasing staff will work hard to control purchase prices, while sales staff will promptly report to customers the fact that raw material prices have increased and strive to communicate with customers.

There are too many such games designed in the modern strategic budget system, which restrict each other's interests, so that all personnel can automatically and spontaneously abide by the rules of the game and achieve strategic goals.

6. Modern strategic budgets must be formed into written documents, including budget statements and target responsibility statements. The budget must be reviewed and approved and is the guideline for behavior. Once the budget is confirmed, it cannot be adjusted or changed at will.