Sinotruk deploys implementing the overall budget management (photo)

Corporate news      Author:      Date:2008-04-01

     On March 29, Sinotruk organized the first term training course of the overall budget management of 2008.  Wang Guangxi, vice president of Sinotruk lectured and Song Qidong, deputy chief accountant of Sinotruk and chairman of Finance Company of Sinotruk chaired the course.  Executive directors from branch units of independent business accounts of Sinotruk and chief finance officers about 60 people attended the course.
     The overall budget management means under the guidance of strategic targets of the enterprise, it fully and comprehensively predicts and plans business activities and the corresponding finance outcome in future, and by monitoring the operation process being implemented and controlling, it compares and analyzes the actual accomplished situation and budget targets continuously so as to direct the improvement and adjustment of business activities in time, which helps managers operate the enterprise more effectively and realize strategic targets in maximum extent.  The overall budget management needs fully bidirectional communication and the participation from all relevant departments.
     The significance of the overall budget management to a modern enterprise can be summarized as fellow:
     First, the overall budget management enhances strategic management ability.  The overall budgeting will make the strategic target solid and quantified, and the implementation of the budget and the realization of the enterprise’s strategic target will be in a same process; the effective monitoring of the budget will ensure the realization of the enterprise’s targets in the maximum extent.  Through budget monitoring and controlling, one can find unpredictable opportunities and challenges, information of which will feedback to the decision-making organization by budget reporting system, which will help the enterprise adjust strategic plans dynamically and promote the reaction capacity of the enterprise’s strategic management. 
    Second, the overall budget management provides effective monitoring and assessment.  During the progress of budget making the company and its branch shall communicate each other for providing full information that contains fixed and rational achievement targets to both sides and in the same time the outcome of the implementation of the budget is an important judging base to valuate the performance.  It is an effective means of monitoring and controlling for the manager to compare and analyze the budget with the situation being implemented.
    Third, the overall budget management uses enterprise’s resources with high efficiency.  The process of budgeting and target data of budgeting directly indicate the resource-use efficiency and the need for various resources the company and its branch companies and departments, so it is the starting point for allocating the enterprise’s resources.  By drawing up and balancing of the overall budget, the enterprise can arrange and use the limited resources in an optimal way to avoid resources waste and inefficient use of resources.
    Fourth, the overall budget management effectively manages business risks.  The overall budgeting can initially reveal the enterprise’s next year’s operation situation, which exposes the possible problem ahead of time.  Referring to the result of the budget, the high management of the company will find where the potential risks are and take the corresponding preventive measures so as to avoid and resolve risks.
    Fifth, the overall budget management promotes income and saves cost.  The overall budget management, check and reward-punishment system effecting together can inspire and restrain the relevant parties making them pursue the return as high as possible and cost as low as possible.  In the process of drawing up the overall budget, the relevant person shall rationally analyze the enterprise’s environmental change to ensure feasible the enterprise’s return and cost saving plan.  The monitoring process of the budget implementation follows realization and change tendency of two key targets of capital and cost，which forces the main body of the budget implementation to make rapid and effective reaction to the influence made by market change and cost saving, which promotes the ability of reaction of the company.
    The overall budgeting is a comprehensive plan that concerns every aspect of a company including operation, capital, and finance and so on in a certain period of time, and it reflects all the economic activities of the company in terms of currency.  In the end, the overall budget reflects a complete set forecast of financial reports and table of appendix which is mainly used to plan the overall business activities and relevant finance outcome in a scheduled period of a company. Referring to its business activities in relationship, the overall budgeting can be divided into financial budgeting and non-financial budgeting, and the financial budget is about the budget of capital raising and utilizing, and non-financial budgeting is mainly about the business budget to predict and plan the basic economical activities of a company.
    As a management system which had greatly promoted the maturity and the development of modern enterprises, the overall budget management is a main method for internal management control of a company.  Since having emerged in the US companies such as General Electric, Dupont, and General Motors in 1920s, the overall budget management quickly became a standard operation procedure in large industrial and commercial companies.  From the initial planning and coordination it has developed to today’s management tool, the overall budget management comprehensively functions concurrently control, motivation and appraisal for the comprehensive implementation of business strategies of the company, and it has played a more and more important role as a core in the internal control of a company.  Just as a famous management scientist David Otley said that the overall budget management was one of the several management control methods which could integrate all crucial problems of a company into one system.
    In recent years, Sinotruk persists on scientific development, rational operation, careful management, and pursuing optimal benefits, every work has obtained great breakthrough and progress, realizing qualitative development and leap, and the management level of the company has further promoted.  The internal control standard of the company has been further strengthened and according to the requirements of a company with IPO outside the mainland, Sinotruk has rectified new work systems basically covering every aspect of the company’s operation which is running in good condition now.  At the same time, Sinotruk has also established Chief Legal Advisor system.  Finance control system has also been further improved and “One-Line-Through” operation for management has been implemented gradually.  On November 28, 2007 Sinotruk (Hong Kong) Limited was successfully listed on the main board of Hong Kong Stock Exchange, raising funds over 9.95 billion Hong Kong dollars, and it became the first as well as the largest red chip stock of China’s manufacturing industry listed in Hong Kong.
    The general target of Sinotruk in 2008 is ensuring production and sales volume of 125,000 units, striving for 135,000 units, and realizing sales income of 50 billion RMB to lay a solid foundation for the full accomplishment of the target of the 11th Five-Year-Plan plan till 2010.
    Facing the new developing opportunities and challenges of market, to continue strengthening meticulous management which takes financial management as main contents, and further promoting the level of financial management and capital operation becomes one of the important tasks of Sinotruk.  It is necessary to ensure fast and smooth development of Sinotruk by means of consolidating communication and training extent on international finance knowledge, regulations, and business and so on, strengthening finance training  domestic and overseas, improving the quality of finance staff comprehensively and taking the internationalization of finance as an important issue to research.  Based on that, the comprehensively promoting and implementing the overall budget management of Sinotruk has important significance.
    In this training course, combining theories with reality, Wang Guangxi in plain language talked about in depth the structure, focus and requirements of the overall budget management to the staff by using easy and understandable words, making the staff have a systematic understanding to the knowledge of the budget management, and have a more definite understanding in connection with internationalization of the company management according to the requirement of the operation of a listing company.
    It is said that Sinotruk would continue to organize and carry out special training courses concerning many aspects of the overall budget management including business operations, funds, cost expenses, tax and so on.