Budget Management Role In Resource Allocation At Enterprise

Enterprise budgeting is the administration of estimating the prospective corporation aim and plan in terms of its financial position and other quantities of resources. It includes specific plan and controlling system to realize the strategic goal of the enterprise. Enterprise can be more risk resistant under the competitive economic environment if they are effective in proposing specific goal of sale, production, distribution, finance etc., implementing operation plan and preparing themselves for any adjustments. Enterprise can maximize its value and greatly improve the corporate management and structure. Thereby, budget management has been widely accepted in many eastern and western corporation practices (especially in developed countries ) .Enterprise budgeting plays two major roles in the business planning, resource allocation and operation control. This paper emphasizes its role in resource allocation based on the principle of budget management. Market mechanism allocates resources to enterprises or projects, which is a macro economic decision of allocating the initial resources. However, the optimization of the allocation of the initial resources is dependent on the microeconomic enterprise budgeting and allocation of the input resources. The budget management is essentially a type of asset controlling system, which could optimize the resources allocation via controlling the allocation procedure and the production operation. Furthermore, as an internal fiduciary duty, budgeting can effectively resolve the conflict of interests between the client and the agent due to the separation of the owner and the management in the corporation.This paper has studied the strategy of allocating resources through budget management and some related difficulties. By proposing and implementing the budget plan, the allocation of enterprise resources can be optimized. And the budget controlling system ensures the best results of the allocation and realizes the goal of the budgetmanagement. Furthermore, difficulties and problems appeared in budget management have been discussed. A strategy of building up a sound budgeting conception and effectively implementing the budget controlling system has been proposed in this paper.