Comprehensive cost management system
Total cost management is the first step and core content of implementing management accounting. In order to scientifically measure the cost management level and operating performance of various departments, offices and branches of commercial banks with management accounting methods, commercial banks implement the responsibility cost system. After defining the position of the responsibility center of the whole bank, they can use management accounting to adopt a more scientific, reasonable and practical distribution method to complete the collection and distribution of various costs in cost objects such as departments, products and customer groups, and realize comprehensive cost management.
Commercial banks divide the responsibility center into three parts: management and support center, service center and profit center. The first step is to calculate the direct cost to the corresponding responsibility center;
The second step is to allocate the expenses of the management support center to the profit center that receives its services, and allocate the expenses of the service center to the profit center that receives its services, so that the profit center will become the ultimate undertaker of all the costs of the whole bank;
The third step is to link products and expenses through multiple driving factors after the business line cost is clear, so as to further realize the allocation of expenses among products.
(1) Cost accounting method.
1, comprehensive cost accounting management level
According to the characteristics of the organizational structure of commercial banks and the need to realize the goal of total cost management by using management accounting methods, cost accounting management is at the basic level in the management accounting system.
2. Indirect cost accounting
There are relationships among the head office, branches and sub-branches of commercial banks, as well as between the departments and branches of the head office. According to the requirements of total cost management, the service cost generated by providing internal management and services should be transferred from the providing department to the receiving department, which is reflected as the indirect cost of the receiving department, thus fully reflecting the real operating cost of each institution or department.
According to the management requirements of internal cost accounting of a commercial bank, combined with the characteristics of its organizational structure and department setting, a vertical and horizontal cost sharing structure is set up. As the bottom accounting level of cost allocation, the front-office profit center entity of the head office and branch ultimately bears all the costs of the whole bank.
(2) The actual effect and existing problems of applying management accounting to implement total cost management in commercial banks.
1, the effect of applying management accounting to implement total cost management
Commercial banks implement comprehensive cost management based on business processes and cost drivers, and determine the business processes and business activities that must be carried out according to customer needs. Through the investigation, decomposition and evaluation of all links in the business process, unnecessary links are deleted, compressed or integrated, and the production factors of various departments are recombined in a natural way, so as to fundamentally eliminate redundant costs and realize the best intensive management effect.
After adopting the total cost management method, the whole bank has realized refined cost management, and on this basis, it has realized the multi-dimensional profitability analysis of the whole bank, including:
(1) Strengthen the awareness of cost responsibility of all branches and realize cost responsibility control.
(2) It has realized the comprehensive cost accounting and management of business lines, provided summarized basic information of cost control for all business lines, defined the cost input of the whole bank, and refined the cost attribution.
(3) It is helpful to accurately calculate the cost level of each product and provide cost information for the pricing and profitability analysis of new and old products of banks.
(4) Provide comprehensive cost level related information for the assessment management of marketing personnel in the bank.
2, the implementation of total cost management problems
The erp management accounting version of commercial banks has the function of making full use of responsibility center accounting, profit center accounting and profit analysis to support internal management decisions. However, how to accurately divide the responsibility center and conduct cost accounting and distribution in a more appropriate way is a problem worthy of in-depth study. In addition, how to determine the scientific and reasonable driving factors to allocate costs to departments, products and customers, and how to closely combine cost management with budget and assessment have not been fully and effectively solved.
Second, the budget management system
Commercial banks use management accounting methods to make comprehensive budget management possible, and implement comprehensive budget management and quarterly rolling budget management. Comprehensive budget management aims to achieve development strategy and annual business objectives, and is the main basis for banks to carry out business activities. It includes business line budget, product budget and branch budget, covering the main aspects of bank operation such as business development, asset quality, financial budget and capital plan. The purpose of quarterly rolling budget is to strengthen the process management of budget implementation, strengthen the connection between business plan and financial budget, regularly monitor and analyze the completion of various business plans and financial budgets, scientifically analyze their influencing factors and degrees, take corresponding measures in time to correct the deviation of budget implementation, and ensure that the annual budget objectives are realized step by step.
(A) the use of comprehensive budget management.
Commercial banks implement a "compartmentalized" budget management framework: business line budget and branch budget. "Business line budget" is a budget method based on four business lines: corporate business, private business, capital business and financial market, which classifies financial revenue and expenditure and economic profit into the above-mentioned business departments with profit responsibility. This is a budget method widely used by advanced banks at present. "Branch Budget" is a budget method with branches as the center of profit responsibility.
In this framework, economic profit is the core and end point of the budget. According to the management accounting method, the economic profit is calculated by organization, product and business line. Profit after considering internal capital transfer price, indirect cost allocation, budget loss and capital cost is the economic added value after deducting rate of return on capital (or opportunity cost of capital occupation), and it is the core index to measure the operating performance of branches, business lines and products.
In the process of implementing the comprehensive budget, in order to ensure the realization of the established objectives, it is necessary to make the established objectives concrete by compiling the general budget, and implement the business objectives in all aspects of business management in a quantitative form, forming hierarchical budget, departmental budget, product budget, customer budget, monetary budget and so on. Under the control of comprehensive budget, it provides standards for the process control of business management and provides basis for the evaluation and examination of business management.
(B) the use of rolling budget management.
The quarterly rolling budget implemented by commercial banks means that all operating institutions (including the head office, branches and business lines) comprehensively consider various future influencing factors such as business volume, market interest rate, cost-benefit level and risk status changes according to the existing operating conditions, and predict the budget completion of each quarter. The quarterly rolling budget provides support for the realization of the annual rolling budget, which is realized through the quarterly budget to ensure that the annual budget indicators are implemented quarterly and monthly.
"The main actor, supplemented by institutions;
Head office guidance, branch preparation;
"Analyzing deviation and guiding operation" is the basic principle for commercial banks to prepare rolling budget. Its basic framework is to build a bottom-up summary preparation process based on the scientific budget of branch business lines, comprehensively consider the changes of influencing factors such as analysis and market interest rate in the future cycle, take product business volume forecast as the starting point, and follow the basic steps of business scale forecast, influencing factor analysis and comprehensive balance preparation process, and finally form a rolling budget report by product, business line and branch. According to the rolling budget results, analyze the deviation degree and reasons of budget execution of branches and business lines, and implement corrective measures accordingly.
(three) the implementation of the comprehensive budget, the effect of the rolling budget and the existing problems.
1, the effect of implementing comprehensive budget and rolling budget
Implementing a comprehensive budget and strengthening budget management in commercial banks not only clarifies the development strategy of banks and coordinates the work of internal institutions and departments, but also plays an important role in controlling the daily operation and management activities of banks and effectively assessing the operating performance of employees. The specific performance is as follows:
(1) established a comprehensive budget system for branches, products and business lines, which played a positive role in promoting the reform of the division system.
(2) Rolling budget is conducive to strengthening the process management of budget implementation, strengthening the connection between business plans and financial budgets, regularly monitoring and analyzing the completion of various business plans and financial budgets, scientifically analyzing their influencing factors and degrees, and taking corresponding measures in time to correct the deviation of budget implementation, so as to ensure that the annual budget objectives are realized step by step.
(3) By introducing advanced management accounting methods of international banks, the core of economic profit eva (economic added value) and return on capital is highlighted, and related economic parameters such as ftp (capital transfer pricing), budget loss rate, capital allocation and cost allocation are used to advocate comprehensive cost management and capital constraint, emphasizing the concept of maximizing shareholder value.
2. Problems existing in the implementation of comprehensive budget and rolling budget.
(1) The internal fund transfer price used in the budget is subjective.
(2) The allocation of resources around the core goal of profit budgeting may make budgeting focus only on short-term activities and ignore long-term goals.
(3) Not making full use of the feedback information of the budget implementation results. After the implementation of the budget, some budget management departments have also made data feedback, but there are still some problems in the transmission and utilization to the decision-making level.
Third, the capital transfer price system.
On the basis of learning from the advanced experience of foreign commercial banks, A commercial bank has also built a unique fund transfer pricing system. Fund transfer pricing is a method to determine the internal source and price of funds based on a single transaction (single account) and the market interest rate of funds. It is based on a single account (single transaction), the capital market interest rate, the premise of a unified fund pool of the whole bank, and the goal of all items in the balance sheet.
(A) the design practice of capital transfer pricing.
The capital transfer pricing system designed by a commercial bank is based on the term matching model. The whole bank sets up a single yield curve, selects the appropriate capital cost accounting method according to different product characteristics, and calculates the "internal spread" of the business one by one. Keep the spread of each product in the business department, and only transfer the income generated by maturity mismatch to the Treasury Management Department of the Head Office.
One of the purposes of capital transfer pricing is to evaluate the opportunity cost of capital use. Its basic principle is to formulate unified capital pricing rules within banks. Based on the supply and demand of funds, different business departments are established as internal customer relationships, and the deposit and loan products are divided into "spreads" fairly according to the unified fund transfer pricing rules, so as to reasonably determine the opportunity income of the fund-raising department and the opportunity cost of the fund-using department.
The yield curve of capital transfer pricing is an interest rate curve constructed according to products with different maturities in the capital market. The transfer price of any transaction is obtained through the yield curve. In the process of constructing RMB yield curve, based on the coexistence of regulatory interest rate and market interest rate in China's financial market, a commercial bank adopted the term premium of central bank's regulatory interest rate as the basis, and fully considered the deposit premium, liquidity cost, credit spread and other factors to construct a yield curve with its own characteristics. The yield curve is published daily, calculated one by one, and the results of the calculation one by one are summarized to form the economic profits of products, departments and business lines as the basis for performance appraisal. In addition, according to the characteristics of a commercial bank, five fund transfer pricing methods are adopted: fixed distribution method, weighted alternative interest rate method, average interest rate method, duration method and index plus spread.
(2) The application effect and existing problems of fund transfer pricing.
1 the application effect of capital transfer pricing
A commercial bank has established the concept of capital constraint in the whole bank. Capital is not a free resource, and it takes a cost to occupy it. Only when the value exceeds the minimum return of shareholders can performance pay be obtained. The value of funds is measured by opportunity cost, and the transfer of funds between the head office and branches needs to be objectively calculated to distinguish the costs and benefits of various departments. Determining the internal transfer price of funds means how to allocate resources reasonably, which department should allocate resources to meet the optimal allocation mechanism of the market, the number of allocations and so on. Specifically, the application effects of fund transfer pricing in commercial banks are as follows:
(1) has realized the transformation of the market risk management function of the head office and branches. After the implementation of ftp system, the market risks of most products of branches are centralized in the fund center for unified management. The interest rate risk management function of the head office and branches has completely changed, which puts forward higher requirements for the market risk management department of the head office.
(2) It can provide a basis for product pricing. If the credit department issues loans, its pricing shall not be lower than the price of obtaining funds from the "internal capital market";
For another example, the price of deposits absorbed by the deposit department shall not be higher than the price of "selling" to the "internal capital market".
(3) It is a tool to implement the bank's business strategy. The price of internal funds also has the leverage to guide the flow of funds, which is conducive to the bank's implementation of business strategy.
2. Problems in the application of fund transfer pricing.
Capital transfer pricing is to formulate unified capital pricing rules within commercial banks, but there are still the following problems in the specific implementation process:
The determination and adjustment of (1) benchmark yield curve is the core technical work. At present, the benchmark interest rate has not been fully marketized, and market segmentation and other factors lead to incomplete information, which needs to be constantly adjusted and gradually improved with the development of the market.
(2) There is a problem of market competitiveness caused by irrational competition in the market.
Influenced by many factors, banks still follow the extensive business strategy of pursuing scale expansion to a certain extent. In the business field with fierce market competition, they do not hesitate to sacrifice their interests for scale and participate in the competition at irrational prices. Rational pricing according to ftp price may put branches in a dilemma, participating in irrational competition will harm interests and rational pricing will lose the market. Without proper guidance, branches may be at a loss.
(3) The break of the original interest pattern leads to the redistribution of the interests of branches.
After the implementation of ftp system, the new capital cost (income) accounting method will reflect the net interest income contribution of each branch more fairly and reasonably, and the maturity mismatch income will be stripped from the branch and reflected to the head office. Under the current income structure dominated by net interest income, this change in accounting method will inevitably break the original profit contribution pattern of branches. If the performance appraisal method of the whole bank does not completely match this, this change will inevitably affect the vested interests of some branches. If it is not handled properly, it will bring invisible resistance to the application of ftp system and affect the application effect of ftp system.
(4) Market risk management caused by the lack of hedging tools in RMB market.
Compared with the mature financial market and abundant financial instruments in the west, the external environment of RMB makes the centralized management of market risk of domestic commercial banks face greater challenges. In the market environment of RMB financial market with relatively single trading subject, relatively scarce trading varieties and limited derivatives and hedging tools, it may be difficult for the Head Office to effectively hedge the centralized market risk, which may lead to the problem that the policy effect of centralized management of market risk through ftp system will be affected.
First, the performance evaluation system
In the early 1990s, Robert Kaplan and his partner, David Naughton, created a new management accounting method-the balanced scorecard, aiming at expanding managers' attention. This method organically integrates financial indicators and non-financial strategic indicators into an evaluation system through causal chain, and establishes a scientific performance evaluation index system on the basis of considering the main factors affecting the success of enterprise strategic operation. It pays attention to the result index and driving index, making it a forward feedback management control system and making an important contribution to the innovation of performance evaluation index system. The balanced scorecard is mainly composed of four parts: finance, customers, process and organizational ability.
(A) the specific application of the balanced scorecard.
After many adjustments, a commercial bank has implemented a comprehensive value management system and performance appraisal mechanism with economic profit as the core, which mainly includes the head office issuing economic profit indicators to branches and business lines respectively, the performance compensation of branches and business lines is linked to economic profit, and capital occupation fees are charged according to the economic capital of branches and business lines. This is an effective method to comprehensively use the balanced scorecard to evaluate and motivate branches, lines and departments. Management accounting system provides a technical basis for the implementation of balanced scorecard evaluation, which can provide the profitability of different lines, institutions and products.
1. The balanced scorecard is a tool to transform the mission and strategy of an enterprise into a set of all-round business objectives and measurement indicators, and to evaluate and monitor the implementation of the strategy. It is also a tool for strategy manager to communicate effectively with the management objects. Balanced scorecard pays attention to financial indicators, and at the same time takes into account the driving factors to promote the realization of financial indicators. The balanced scorecard measures the performance of commercial banks from four different dimensions, namely, finance, customers, processes and organizational capabilities. Its core idea is to show the strategic trajectory of the organization through the causal relationship driven by these four indicators, and realize the strategic goal process of performance appraisal-performance improvement and strategy implementation-strategy revision.
2. Four dimensions of the balanced scorecard.
Financial dimension-the focus of balanced scorecard. The purpose of the financial dimension is to solve the question "What do shareholders think of us?" That is, how to reduce risks, increase income, increase income and reduce costs. It is the starting point and focus of the other three aspects, and it is also the destination of strategy. The corresponding indicators include paid business coverage, income growth rate, fee refund income, fund benefit index, savings service cost and so on.
Customer dimension-the balance point of balanced scorecard. The customer dimension reflects the customer's value proposition, and its goal is to solve "how customers view us", that is, to establish the market, develop products, market and sales, distribution and service. Customers here include external customers and internal customers. The corresponding indicators include stock price, percentage of new product income, new income of each salesperson, sales contract of each salesperson, profitability of each customer, service mode provided, time required for completion, satisfaction of internal customers, etc.
Process dimension-the focus of balanced scorecard. After establishing the indicators of financial and customer dimensions, it is necessary to closely focus on finance and customers and analyze the work priorities of enterprises from the perspective of internal operation processes of organizations. The goal of process dimension is to solve "what are our strengths", that is, cost efficiency, risk and quality. The corresponding indicators are efficiency indicators, risk and return indicators and quantitative and quality measurement indicators.
Organizational ability dimension-the basic point of balanced scorecard. The excellence of the core processes within an enterprise increasingly depends on the abilities of employees at all levels in the organizational atmosphere, namely, retraining, strategic information and management responsibilities. The corresponding indicators are the strategy of improving work ability, the use of strategic information, the combination of personal goals, the combination of strategic resources and the satisfaction of employees.
(2) The practical application effect and existing problems of the balanced scorecard.
1. The practical application effect of balanced scorecard in commercial banks.
(1) It promotes performance management to the strategic level and considers performance from the overall perspective;
At the same time, it pays attention to the vertical and horizontal coordination and unity, breaking the traditional view of functional departments. This can not only eliminate the departmentalism of various departments, but also eliminate the complex and redundant management activities caused by departmentalism.
(2) Establish causal strategic objectives from four dimensions, and set forward-looking key performance areas in them, so that commercial banks can monitor the progress they need to make in enhancing their future development capabilities while understanding their financial results, so that banks can fully consider all key performance areas.
(3) Pay attention to the dynamic management process rather than static assessment, and emphasize communication and review in the performance management process rather than "settling accounts after the autumn".
(4) The business focus and its measurement should be clear at a glance, and people at all levels should be encouraged to participate in the design of the balanced scorecard, so that everyone can reach a consensus, jointly realize the enterprise strategy, and provide a common language for people at all levels to exchange performance.
2. Problems existing in the practical application of the balanced scorecard.
(1) The balanced scorecard evaluation needs an accurate budget. The balanced scorecard is scored according to the budget completion, and only when the budget completion is good can you get a high score. Accurate budget is the guarantee to ensure the best result of balanced scorecard evaluation. This puts forward higher requirements for budgeting.
(2) As a pioneer in implementing the balanced scorecard in domestic banking industry, A commercial bank has no external experience to learn from, the integrity of the overall framework design needs to be developed, and there is insufficient data support, which all hinder the specific application of the balanced scorecard.
Verb (abbreviation of verb) Suggestions and conclusions
By analyzing the application effect of the four processes of management accounting in a commercial bank, we can see that the management accounting project has been effectively applied to performance evaluation and financial budget after adopting mature management accounting processes and internationally accepted management accounting methods, which has made the commercial bank take a big step to the level of international leading banks in management technology and means, which undoubtedly has important reference significance for improving the banking industry, management level and operating performance. When scientific management is applied to commercial banks, the role of management accounting is irreplaceable.
Of course, we should also see that the implementation of management accounting is a long-term and complicated systematic work, which cannot be accomplished overnight. There are still some difficulties in the implementation process. For example, if management accounting wants to analyze the profitability of products and customers, it needs to obtain detailed product income and cost information, customer transaction information and customer relationship information, which are difficult to obtain in bank core business systems and other systems, and data quality has become a bottleneck of management accounting. In view of the existing problems, we should strive to make breakthroughs in the following aspects and gradually promote the implementation of management accounting in domestic banks.
First of all, raise awareness, change ideas and strengthen leadership. Leadership is the key to the implementation of management accounting, which involves changes in management ideas, management methods and management systems, and these changes are restricted and influenced by leadership concepts. Therefore, as managers of commercial banks, they should change their ideas, improve their understanding of management accounting, change the present situation of one-sided pursuit of market operation and neglect of internal management, attach importance to financial accounting and despise management accounting, and establish a new concept with flat management accounting as the main body.
Secondly, integrate the existing business systems and establish a scientific accounting system. Domestic commercial banks have the characteristics of wide business coverage and numerous operating institutions. By further improving the comprehensive business system of banks, we can provide more humanized services for customers.
Fully study and learn from the advanced concepts of foreign bank management, use modern information technology means, adopt the way of bank-wide data concentration, truly realize the flat and centralized management of banks, and provide data support for financial innovation, management and decision-making of banks.
Then, strengthen training and improve the quality of accounting personnel. As a comprehensive management discipline, management accounting requires higher quality of employees. Therefore, employees at all levels of commercial banks should also receive training in time to master the connotations and concepts of various management accounting systems, and change from the current auxiliary bookkeeping to participating in business management, thus providing more detailed, accurate and fast information for management accounting.
Finally, the implementation of management accounting is a long-term and arduous systematic project, involving all aspects of domestic banks, so it needs to be balanced, implemented steadily and focused.
With the continuous improvement of management accounting and the maturity of external conditions, management accounting will gradually develop into a two-way information communication system, which will play a vital role in the internal planning, decision-making, control, communication, encouragement and evaluation of commercial banks.