The Establishment Of The Comprehensive Budget Management System For Hebi's Zhongtai Mining Co., Ltd.

The Zhongtai Mining Industry limited Company in Hebi (the hereafter refers to as the Zhongtai) is located along the Mount Taihang arteries, in Hebi City of Henan Province with very rich coal mineral resources, which is integrated by coal mining, the production, the processing and the sale into a joint venture enterprise. The two parties are Hebi Coal Electricity Limited Company and the Wanpu Groups Company in Tailand , and China purchases of 60% shares (completely for state-owned capital), the Thailand occupies 40% shares.The Zhongtai is set up on the basis of the old coal state-owned enterprise, the level of management is relatively backward, the comprehensive budget management should be implemented to improve the management system and promote management level, as one of the series of measures.The body takes up the comprehensive budget management from four aspects: Firstly, the necessity of Zhongtai to carry out the comprehensive budget management; Secondly, the premise and the foundation of implementing the comprehensive budget management; thirdly, the design of comprehensive budget system; fourthly, the enlightenment of carrying out the comprehensive budget management system for the Zhongtai.The first part elaborated several vital significances for the Zhongtai to carry out the comprehensive budget management. First, it may safeguard the enterprise strategic target to realize. Second, it may push forward the enterprise reform. Third, it may optimize resources disposition and enhance the ability of gaining profit.Fourth, it makes the staff clearer about the work motive, and stimulates their enthusiasm for working. Fifth, it makes economic activity of the various departments to act coordinately. Sixth, it strengthens the business controlling further. Seventh, it correctly appraised the achievement of various departments. Eighth, it strengthens the financial control function and realizes the internal control function of the enterprise.The comprehensive budget management, as a systematic management system, its running needs the certain premise and the foundation, in the second part, the paper emphatically elaborates this aspect. The prerequisite of the comprehensive budget management consists of the approval and the support of the lead ship, the sense of participation of the whole staff, a high-level financial team, the improved financial control organization construction, and to form the motivation system related with the rewards and punishment and clear duty arrangement, and so on. In addition, the company has also made some foundation work before the budget management implementation, for example establishing comprehensive budget management organizations and agencies, formulating the comprehensive budget control system, establishing the comprehensive budget form, budget training and so on.The comprehensive budget control system design is the key of the whole of the article. The third part of the body has described it with three small chapters, they are respectively the theory basis and the guiding principle of establishing comprehensive budget control system; the basic content of the comprehensive budget control system; the execution situation, existing question and solution of the comprehensive budget management.The theory basis for various enterprises to formulate the comprehensive budget control system is approximately the same, which is all originated from"Instruction Opinion About Implementing Financial Budget Management of Enterprises " (the hereafter refers to as instruction opinion) promulgated by Ministry of Finance promulgates in April, 2002. How "Instruction Opinion" gives the frame instruction to implement the budget management from seven aspects, which are respectively: First, the basic content of the financial budget management; Second, the organizations of the financial budget management; Third, the form and composition basis of financial budget; Fourth, the composition procedures and method of financial budget; Fifth, the execution and control of the financial budget; Sixth, financial budget adjustment; Seventh, the analysis and inspection of the financial budget. The Zhongtai takes this"Instruction Opinion" as the foundation, and have formulated the budget system combined with the company's actual situationThe comprehensive budget control system of the Zhongtai has ten chapters in total, which are respectively the general rule, the organizations and agencies, the budget unit, the budget content, the budget establishment, the budget implementation and control, the budget adjustment, the budget analysis and report, the budget checking ,evaluation and motivation, supplementary articles. The general rule partially described the budget principle, proposes the budget management system of "the unified planning, the level-to-level administration"; The organizations and agencies partially pointes out that the company must set up the comprehensive budget management committee, the budget management department, the budget responsibility group; The budget unit can be divided into the cost center, the expense center, the profit center according to the different responsibilities; The budget content pointes out that the budget is divided into the management budget, the capital budget, the financial budget; The budget composition uses "from the top downward, from bottom to top, union of the up and down" the principle, and highlights the comprehensive and democracy principle; The budget implementation and the control are the content of the budget work, which emphasizes each budget unit should carry on the control according to the principle of "No budget, no pay wages, the budget without exceeding expenditures; Who disburses, who budgets, who controls; Who profits, who undertakes ";The budget has the rigidity, in the ordinary circumstances ,it may not be adjusted, but under the special situation it can, the budget adjustment must have the certain premise, follows the certain procedure and steps; The budget analysis and report mainly emphasizes three aspects of the contents. First, the method of the budget analyzes. Include qualitative analysis method and quantitative analysis method etc. Second, the budget analysis is procedure. Third, the content of the budget analysis report; the budget checking, evaluation and motivation are the extremely important link, in the comprehensive budget management. This part of content has stipulated the budget examination and evaluation method, the department, but also mush examine and evaluate some targets, and so on, it must manifest the just, air and public principle.Although the Zhongtai has owned all conditions of implementing the comprehensive budget management but the company has faced some problems in the budget the composition stage in 2007.It is mainly manifested in following several points: First, the formation which the upper leadership understands about the comprehensive budget management is insufficient. Second, the management of internal control needs to be enhanced. Third, the function department of some individual units appears to be not unified and coordinated in the budget composition process. Fourth, in the budget establishment process, many people propos "There are too many market invariable factors, the budget is too difficult to be accurate".The leader has focus on these questions of the companies, and has found the solution in the very short time, which makes the comprehensive budget continue to be implemented.Plan one: The full communication with the upper formation leader, particularly the foreign personnel, makes both sides agreed in their opinion. Plan two: According to the request of the comprehensive budget management, we should estipulate the examination and approval flow with the expenditure in and outside the budget and realize the examination and approval jurisdiction of the leaders in all levels. Plan three: The financial department and its the budget management office have to play the role on the communication coordination and the link, and must supervise and help various departments fill in respective budget.The last part is about some enlightenment for the Zhongtai to carry out the comprehensive budget management system, which mainly two points, on one hand, how to make the comprehensive budget management maximize the management function. The comprehensive budget management, as one kind of management system, emphasized person's management, even more it emphasizes the fund management at the same time. The strengthened fund management with giving the fund management the different contents in different stages is the core content of the comprehensive budget management. On the other hand, the relations between the comprehensive budget management and the enterprise strategic target. Budgets itself is not the final goal; what is more, it acts as one kind of tool which relates the company strategy with the management achievements. If the budget management is on the basis of the strategy, it must be able to operate from a strategically advantageous position to establish the enterprise's strategic status in the market competition.