Project 3. Implementation of a system of budgeting in a company

Implementation of a system of budgeting in a company

Period: 2014

Location: St. Petersburg

Sphere of business: manufacturing of high-resolution equipment and software for oil-and-gas industry.

Client and Case: A company which manufactures high-resolution equipment and software for oil-and-gas industry faced a problem of abusive budget funds spending, this caused cash gaps and permanent scarcity of funds.    

Objectives – to implement an efficient system of budgeting.

Most of solutions for implementation of budgeting, which are offered by consulting companies, are for common use. This would not match the client requirements. So the following tasks were set:
•    to improve and make transparent a system of financial management with possibility to control expenses of a company
•    appoint people who are responsible for drafting and meeting of a budget
•    elaborate a system of base classifiers
•    identify methods of data alteration, accounting, description of all processes with all details of unique managerial operations
•    determine algorithms of planning for all classifiers
•    elaborate a financial structure of a company
•    make an order in a system of data acquisition  and schemes of budgeting.

Challenges we faces during the project realization:
-    cash flow and main assets were shared among several companies. This made more complicated a preparation of consolidation of managerial accounting and reporting
-    operating cycle of a company had dynamic. Annually a company implemented 1 or 2 big projects, meanwhile a routine work was carried out. This point should be considered within budgeting process. The system itself should considered a possibility to “switch”
-    the business of a company was diversified, this made a budgeting system complicated with several levels. The more the business is diversified, the more complicated the system.  
-    psychological aspect: stable opinion of employees that it is not possible to plan anything and about exclusiveness of business-processes at this company.

Steps of project realization:  
- analysis, classification and appraisal of business processes
- elaboration of basic standards of a system (base classifiers)
- financial structuring, appointment of Financial Responsibility Centers
- elaboration of algorithms of planning for all classifiers, data acquisition, determination of detailing of planning  
- elaboration of budgeting model
- testing of a system, elimination of errors, installation.

Project results:
•    A budgeting system of accounting is installed in a company. It is clear for each employee and it incorporates a company development strategy, comparability of planned and real data for analytics and for periods.
•    Cash gaps are eliminated as a result of systematic planning of incomes and expenses. Financial director has got a mechanism, which allows forecasting a shortage of funds and rescheduling periods of non-priority payments.
•    The top-manager is free from routine-work on adjustment of payments. Payment limits on standard item of expenses and rights of employees on budget managing of a department are appointed within monthly /annual budgets and delegated to the next level of management as well as responsibility.  
•    Opportunity to appoint in figures objectives and restrictions, and to build up a clear, reasonable and impartial system of appraisal and motivation of employees

Why BA Group?

1. Workshop "tailoring". We work with each client in a special way, based on its specific needs, combining ready-made and unique solutions tailored to each company.
2. An integrated approach. We try to provide solutions to the maximum range of challenges facing the Client. Our experts have developed a range of services in support of business on the principle of "one window", including accounting, legal services, advising on financial and personnel matters, services in the company's internationalization, support of foreign trade activities, and others.
3. The success of our clients - and our achievement, because we are working on the result. Our team consists of professionals working practices with years of experience of quality work. We invest time and money in training its employees and the development of advanced technologies.

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