What are the functions of logistics cost budget?

The function of logistics cost budget:

1, the logistics cost budget can further clarify and concretize the planning objectives.

Logistics cost budget strengthens the comparability of planned objectives, and provides deviation information as a basis in time and clearly during the implementation of the plan, so that management can take effective measures to expand profits or reduce losses. At the same time, the logistics cost budget makes the planning objectives clear, which is convenient for individuals and organizations to understand and grasp, and helps them to understand their position and role in the overall work of the enterprise, thus strengthening the guidance and incentive of the planning objectives.

2. Logistics cost budget can coordinate the logistics activities of enterprises.

Through the preparation of logistics cost budget, we can organically combine the objectives of various organizational levels, departments, individuals and links, and clarify the quantitative relationship between them, which is helpful for various departments and business links to strengthen internal communication and coordination efforts through formal channels, and closely cooperate from the perspective of the whole logistics system to achieve maximum economic benefits.

3. Logistics cost budget is the standard to control daily logistics activities.

How the logistics activities progress, whether they conform to the scheduled process and whether they can achieve the planned objectives, all need to be analyzed and judged according to certain standards in order to take timely measures. With the logistics cost budget, the relevant departments and units can provide the differences between the actual implementation results and the budget standards in time through calculation and comparison, analyze the reasons, and take effective measures to ensure the smooth realization of the budget tasks and objectives.

4. Logistics cost budget is the basis of evaluating logistics performance.

Logistics cost budget not only establishes the action objectives of all departments, links and individuals within the organization, but also further clarifies their economic responsibilities, so that they can be objectively evaluated and assessed, that is, through the comparative analysis of the actual number and the budget number, the economic responsibilities of all departments, individuals and links and the completion of planned tasks are inspected and evaluated.

Activity-based budgeting requires negotiation between functional managers and process managers. Modern logistics cost accounting, especially activity-based costing, provides a framework for activity-based budgeting by determining the implemented activities, resource requirements and unit activity costs. The budget negotiation process uses this information to decide what activities to implement, what drivers and resources to provide, and how much capital requirements will be generated. Activity-based budgeting has changed the characteristics of using information and afterwards budgeting, and changed into a budget based on daily management and integrating daily activities, behaviors and implementation strategies.

Logistics budget management is not only the budget activity itself, but also activity management (ABM) based on activity information and evaluation of value-added activities in business processes. Therefore, it is not only based on enterprise management and logistics policy, but also further promotes the development of enterprise logistics management and strategy.