Analysis of the Effectiveness of the Budgeting Process in Commercial Organizations

Budgeting in commercial organizations is a cross-functional management process, and from the point of view of the internal control system refers to the means of ensuring it. The analysis of the effectiveness of the budgeting process should also be based on the specifics, goals and working conditions of each particular organization. The first stage of the study of the budgeting process was the study of its theoretical foundations: goals, objectives, key concepts of budgeting, approaches to its implementation, budget classification. The methods, tools, and criteria for analyzing the effectiveness of budgeting considered in this paper allowed us to develop a comprehensive method for evaluating it in the context of the components of the balanced scorecard system (financial, customer, internal business process components, development, training, and potential components). To implement the methodology, information on the practice of budgeting in JSC "Pharmprint" was collected and organized, the budgeting process was decomposed into sub-processes and visualized; confirmatory and revealing procedures were performed. Diagnostics of actual and budgetary financial and economic indicators of JSC "Pharmprint" allowed to form a list of shortcomings of the process and formed the basis for evaluating the effectiveness of the budgeting process in JSC "Pharmprint" according to the selected criteria. The final performance indicator was 71%. After applying the control questions method, it became possible to specify proposals for improving the budgeting process in JSC "Pharmprint".