Industry characteristics of budgeting (the case of leasing)
Importance The article deals with organization of budgeting procedures in leasing companies. Objectives The main purpose of this article is to develop approaches to budgeting process organization in conditions of leasing activity specifics. Methods Laws and regulations on topic under consideration, as well as works of leading foreign and national experts in financial planning and budgeting served as a theoretical and methodological basis of the study. Results The study yielded the following most important results: substantiation of the logic of budgeting the activities of a leasing company, formulation of general principles of this process taking into account the specifics of the lessor, presentation of algorithms of budgeting. I provide major recommendations for financial and economic planning of leasing deals. The study explains the logic of the financial result of a leasing project, the reasons of the financial result’s variation, and presents measures to optimize tax payments to the budget. Conclusions and Relevance I conclude that leasing activity has obvious advantages in terms of budgeting procedure organization. I refer to certain predictability of cash flows (obviously, involving acceptable degree of risk). This enables to vary cash flows of a company at the first phase of contract execution, and, accordingly, its financial results, and budgeting procedure helps achieve it. I offer an approach to building an optimal budget of a leasing company. In addition, I provide theoretical substantiation of the principles of financial planning organization in the leasing industry. Their practical application will maximize the financial result from implementing both an individual leasing project and the whole complex or lease transactions, as well as optimize the entire financial flows of a company.