Preparation of the commercial budget in the meat company of Las Tunas

This work was carried out at the Meat Company of Las Tunas, its main activity being the production and marketing of meat products.

We took on the task of analyzing financial accounting information to use it as a tool in the design of a model that facilitates analyzing compliance with the execution of the business plan, coming to propose, in accordance with the requirements and characteristics of this entity, a model that uses income and expense headings used in this activity, demonstrating the importance of the need to use it.

Introduction

Marketing was born in capitalism, as a necessity for the organization of the activities of the circulation of merchandise and the subsistence and enrichment of the capitalist company that, with its development, expanded production becoming a business management approach, under which Customer satisfaction is the means to achieve profit goals.

But this cannot be a simple reason to deny the possibility of its conscious use in the conditions of socialism, turning customer satisfaction into an end and not a means.

Cuba is a socialist country that has used Marketing to some extent, in its foreign trade but not in a generalized way, since for more than 40 years it enjoyed a trade agreed with the former Soviet Union and other socialist countries. It is only from the nineties of the last century, with the fall of the socialist field that the use of Marketing begins to be a necessity to enter and seduce external markets.

At the same time, changes are manifesting in the Cuban market when the monopoly of state property is modified by the entry of foreign capital and self-employment, which establish guidelines for business behavior that the rest of the economy is pressured to assume.

The contemporary era is undoubtedly erected on the power of knowledge, which constitutes a key factor for the productive transformation of nations, ensuring their integration in a more global, competitive and polarized world. Although in our country a policy based on the principle of planning and organization based on development has been privileged, at the same time a budgetary culture has not yet been consolidated.

To this end, we have faced a stage of search and application of modern and advanced business management techniques, which, adapted to our conditions, guarantee an increase in the efficiency of the management of production processes.

The company Cárnica de Las Tunas has been immersed in this process for which it has been taking firm and sustained steps in its participation in the food sector, which due to its sensitive nature, and taking into account its direct impact and relevant weight in the Society is governed by a leading role where changes occur that lead to the development of the entity, highlighting that the Cuban and socialist company is synonymous with efficiency.

Based on the above, this work is carried out arising from the need to control the main expenses of the commercial management of the company Cárnica de Las Tunas. In this sense, the accounting activity takes on a greater role since it constitutes the basis for measuring the execution of the budgets. However, the company does not have an established commercial budget and we were able to observe that different elements appeared that required deep and highly rigorous studies, which in addition to evidencing them, laid bare the ways, methods and procedures to solve the difficulties,deficiencies and insufficiencies that affect the achievement of a high level of information in the organization, which is why there is a need to prepare a budget for the commercial department to measure its efficiency.

You want to measure the behavior of business management, but the problem is that a budget has not been designed for the commercial activity of the company.

That is why if a model for business budgeting is designed then the efficiency of this department could be measured.

In accordance with the above, this work has been designed to design and propose a model to analyze compliance with the execution of the business plan.

Research questions

Is there a history of commercial budgets in the company under study? Are you aware of the existence of procedures or methodologies for preparing this type of budget? Does the current accounting information meet the requirements for preparing the budget? Is it necessary to work on the elaboration of a procedure that responds to the specific characteristics of the Cárnica Las Tunas Company?

This work provides the company executives and fundamentally the Board of Directors with a simple and valuable instrument to measure compliance with budget execution in the commercial department.

Theoretical framework

Definition of budget

According to cost accounting part 1. From Charles T. Horngren: it is a quantitative expression of an action plan and an assistant for coordination and execution. According to the Budget, Planning and Preparation CP; Rodolfo Coeto Mota: it is the previous calculation and balance of the expenses and income of the state and other public corporations that must contain the detailed expression of said expenses and of the anticipated income to cover them during a determined period, generally a year. The Spanish Language: is the advance calculation of the cost of a work and also of the expenses or income of a company or community. According to Larousse: it denotes the income and expenses for a given period in a corporation, a public body, a state. Cristóbal del Río:It is a set of forecasts referring to a certain future period.According to Administrative Accounting, by DN Ramírez Padilla: it is an integrated and coordinated plan, expressed in financial terms regarding the operations and resources that are part of a company for a given period, in order to achieve the objectives set by senior management.

In summary, a budget can be defined as: an integrated, coordinated plan, expressed in monetary terms, which reflects the income and expenses as well as a planning of the operations and resources of a company for a determined period with the purpose to achieve in a planned way the objectives established by senior management.

Budget elements

1- Plan: means that the budget expresses what the administration will try to do in such a way that the company achieves an upward change in a certain period.

2- Integrator: an indicator that takes into account all the areas and activities of the company. It is a plan seen as a whole, but it is also directed to each of the areas in a way that contributes to the achievement of the overall objective.

It is indisputable that the plan or budget of a company department is dysfunctional if it is not identified with the final objective of the organization. This process is known as a master budget. Formed by the different areas that integrate it.

3- Coordinated: means that the plans for several of the company's departments must be prepared jointly and in harmony, if these plans are not coordinated, the master budget cannot be equal to the sum of the parts, therefore creating confusion and error.

4- Financial Terms: indicates the importance of the budget being represented in the monetary unit, so that it serves as a means of communication, since otherwise problems will arise in the analysis of the annual plan.

5- Operation: one of the fundamental objectives of a budget is the determination of the income that will be obtained as well as the expenses that will be produced.

6- Resources: it is not enough to determine future income and expenses of the company, they must also plan, carry out their operations plans. This is basically accomplished with financial planning that mainly includes:

Effective budget - Budget of asset additions (inventories, accounts receivable, fixed assets, etc.)

7- Determined period: a budget must always be based on a period of time, generally one year.

Advantages provided by budgets.

Pressures for senior management to adequately define the basic objectives of the company. It encourages the definition of an adequate organizational structure, determining the responsibility and authority of each of the parties that make up the organization. Increases the participation of the different levels of the organization. When there is adequate motivation, it forces to maintain a file of controllable historical data, it makes it easier for the administration to make optimal use of the different inputs, it facilitates the co-participation and integration of the different areas of the company, it forces to carry out a periodic self-analysis, it facilitates the administrative control. Helps to achieve greater effectiveness and efficiency in operations.It is a challenge that is constantly presented to the executives of an organization to exercise their creativity and professional criteria in order to improve the company.

Budget limitations.

Like all tools, the budget has certain limitations that must be considered when preparing them, or during their execution.

They are based on estimates: this limitation forces management to try to use certain statistical tools to minimize uncertainty, since the success of a budget depends on the reliability of the data we are handling, the correlation and regression. Statistics help to partially eliminate this limitation. They must be constantly adapted to the important changes that arise: this means that it is a dynamic tool because if any inconvenience arises that affects it, the budget must be adapted since otherwise it would lose its meaning Its execution is not automatic: we need the human element of the organization to understand the usefulness of this tool,in such a way that all the members of the company feel that they are the first to benefit from the use of the budget, since otherwise all efforts to carry them out will be unsuccessful. It is an instrument that should not take the place of administration One of the most serious problems caused by the failure of administrative tools is believing that they can lead to success on their own, we must remember that it is a tool that helps the administration to fulfill its tasks, and not to enter competition with it.One of the most serious problems caused by the failure of administrative tools is believing that by themselves they can lead to success, we must remember that it is a tool that helps the administration to fulfill its tasks, and not to enter into competition. with her.One of the most serious problems caused by the failure of administrative tools is believing that by themselves they can lead to success, we must remember that it is a tool that helps the administration to fulfill its tasks, and not to enter into competition. with her.

Objectives that are pursued with the commercial budget.

Planning and organization: the unification and systematization of activities through which the objectives of the commercial activity are established and the organization necessary to achieve it. Coordination: means the development and maintenance of commercial activities in establishments in order to avoid situations of imbalance in the Commercial Directorate.Direction: it is the executive function to guide or lead and inspect or supervise the activities of the subordinates according to what is planned.Control: it is the action by means of which it is appreciated whether the plans and objectives of sales are being met.

Necessary requirements for the elaboration of a budget.

1- Knowledge of the entity: the budgets are always linked to the type of entity, its objectives, its organization and its needs, the forms of its content from one unit to another, mainly in the degree of analysis required, which is why it is Ample knowledge of the company in which they are applied is essential.

2- Exposition of the plan: the knowledge of the criteria of the managers of the entity regarding the objective that is sought with the implementation of the budget.

3- Coordination for the execution of the plan or policy: there must be a budget director who will act as coordinator of all the departments that intervene in the execution of the plan.

4- Setting the budgeted period: the determination of this period operates based on various factors such as:

Stability (long periods). Instability of company operations. Period of the production process. Seasonal sales.

5- Management and Surveillance: once the plans are approved, the areas or departments must prepare their plans or budgets according to the instructions or recommendations that will help the managers to implement said plans.

6- Management support: it is essential for the proper realization and development of the budget that turns them into an operational action plan and pattern of what has been executed and not only informative.

The analysis and information from the accounting area also serve to guide the company in its production and sales plans.

The wants and needs of consumers offer sales opportunities to companies that can make their production decisions, both in quantity and product characteristics, according to these opportunities. This produces a more efficient adjustment between supply and demand.

The Marketing Plan is valued and quantified in the commercial budget. In this sense, the commercial budget constitutes the key element of the strategic marketing management process, since this process concludes with the determination and allocation of the necessary budget to carry out the established plans. Consequently, the commercial budget must be the quantification of the marketing actions necessary for the development of the proposed strategies and an assessment of the position and future results of the company.

The commercial budget should be calculated based on the established objectives, determining how much should be allocated to marketing expenses and how that amount should be distributed. The budget distribution problem is complex, since it must be distributed among the different products that the company sells, among the different commercial variables that the commercial management of the company can use and, finally, in knowing what the response of the consumers of each territory or segment compared to commercial variables.

Brief characterization of the company.

The Management of the Meat Company of Las Tunas, is located at Ave. Camilo Cienfuegos No. 370, Reparto Buena Vista in the city of Las Tunas.

Social object:

Carry out the slaughter of major and minor cattle in national currency. Produce and market wholesale and in national currency and currency meats and their derivatives of different types and qualities, fresh meat, canned meats and fats. Obtain, process and commercialize wholesale and in national currency and currency edible and non-edible by-products such as leather, bait, antlers, eyelashes, bile, hairs and animal meal. Market wholesale and in national currency and currency products produced by other entities of the Union system Edible Meat, Oils and Fats. Market wholesale and in national currency and in textured soybean currency to authorized entities. Offer cargo transportation services in national currency.

The Company has the following structure:

1 General Directorate5 Functional Directorates6 Base Units (UBA)

The budget of the Company under study is not divided by functional Directorates so that it is executed and controlled by indicators that are of interest to them, that is, it is carried out globally (See Annex 2) and the capacity and characteristics of the different activities within it, which is why the need for a commercial budget that streamlines and sets standards in Marketing activity has emerged.

For the preparation of the commercial budget, the sales plan plays a determining role due to the level of information that it provides. In this entity, the plan is received centrally by the Union of Meat, Oil and Edible Fats, which is the one who draws up the strategy and designates the almost invariable figure for the company to adjust to. The entity does not have a commercial budget drawn up to measure the results of this activity and this in turn hinders the development and expansion of its products and the incursion of some of them into the market. In this way, it has no margin to adjust to objective reality, curbing its own development needs and operating expenses that it is invariably forced to assume or which is considerably limited.

During the research work carried out, we set out to search for information on possible antecedents of the existence of a commercial budget in this entity, and our search was unsuccessful since there are no documents in the archives that reveal that this type of information has ever been prepared much less that its behavior, consequence and influence on the general budget of the company have been analyzed.

With the approval or implementation of a commercial budget, the company would be obliged to present a more rigorous information system and exhaustive and detailed planning, so that both are unified or merged in order to achieve established goals.

The company is unaware that there is a methodology or procedure for preparing the commercial budget, so it is somewhat cumbersome for workers in this area to achieve a culture that allows them to see the importance of creating and analyzing it, as it is not properly documented and approved.

The Commercial Directorate together with the sales areas of the different Basic Units must establish an information system that is compatible with the economic area of the Company's Directorate and this in turn with the requirement of its activity, for vertiginous development and gradually, without neglecting the interests of all parties.

For the preparation of the commercial budget, our team considers that the information in the possession of the economic department of the company should be analyzed, and together with the Commercial Management, analyze and discuss until reaching a consensus, based on the figures reached in years. previous and giving the leading level to the sales plan.

It was verified when carrying out a study of the information held by the Financial Accounting Directorate that it has the essential requirements to make a detailed analysis of the fundamental headings that directly affect the preparation of this type of budget.

Starting from a decentralized accounting, we resume that the information flows as follows:

The economic facts are registered primarily in the Basic Units (sales and expenses). The Basic Units send the information to the Financial Accounting Direction in summary form and by means of transaction vouchers. The Commercial Management receives copies of invoices and daily parts from the Basic Units. Collection management is carried out centrally by the commercial area since they are carried out in advance in coordination with the accounting department and after a financial analysis they are transferred to the Basic Units. The Basic Units at the end of the accounting period send the Trial Balance to the Financial Accounting Management. At the end of the month, the Financial Accounting Management must provide the information in summary form on the behavior of the indicators to the Commercial Management.

Based on the knowledge acquired in the course of the investigation and through consultation, we propose that the following accounting information be used to prepare the commercial budget, structured as follows:

Proposals by headings and items of income and expenses for the preparation of the Commercial Budget

Sales revenue Distribution and sales expenses

Auxiliary materials Gas oil Gasoline Wages Accumulated vacation Social security contribution Subsidies Labor force tax Depreciation of AFT Transportation costs Repair and maintenance service Insurance costs Advertising and advertising

With the elaboration of the Commercial Budget in the Meat Company of Las Tunas we would obtain a more commendable tool to measure the efficiency of the Basic Units, since they would strive to reduce their expenses by making a detailed analysis of them and favor the utility in Since these operations are measurable aspects of budget execution.

Outcome

Taking into account the work carried out, our team considers that it is necessary to prepare a procedure that includes in detail the steps to be followed or taken into account for the preparation of a commercial budget that meets the characteristics of this entity, since in the It would also look at specific aspects not applicable to another type of entity and even to companies with similar characteristics but with different environments and situations. It would include the main indicators to be analyzed.

Conclusions

After carrying out the corresponding analyzes and attending to the objectives set, we reached the following conclusions:

1. The need for a Commercial Budget for the Meat Company of Las Tunas is demonstrated considering that its application would provide the expected benefits for the control and identification of compliance with the business plan.

2. The need to carry out a procedure for the preparation of the commercial budget that draws up the guidelines is demonstrated, as this is an activity with its own characteristics.

recommendations

After analyzing the conclusions we reached, the following recommendations are suggested:

1. That a Commercial Budget be implemented in the entity.

2. Once established, use the Commercial Budget for decision making.

3. That this working material be used as a guide to deepen these studies.

Bibliography

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