China is one of the many water-scarce countries, with 90% of urban water bodies being polluted [1]. According to the "Twelfth Five-Year Plan for National Environmental Protection" in China, the country aims to "reduce the emissions of chemical oxygen demand and ammonia nitrogen" to improve urban sewage treatment levels. Efforts are being made to increase the construction of sewage pipe networks, promote rain and sewage diversion, accelerate the construction of sewage treatment plants in counties and key towns, and by 2015, approximately 160,000 kilometers of new urban sewage pipe networks and a daily sewage treatment capacity of 42 million tons will be added nationwide. The goal is to ensure that all counties and key towns have sewage treatment capacity and increase the sewage treatment facility utilization rate to over 80%, with an urban sewage treatment rate reaching 85% [2].
This article takes the Beijing Economic and Technological Development Zone X District Sewage Treatment Plant as an example to explore the construction of a comprehensive budget management system for municipal sewage treatment plants. For a sewage treatment plant, it primarily analyzes, predicts, and makes decisions regarding various aspects such as revenue, operating costs, cost per ton of water, and collection based on the company's strategic objectives. Comprehensive budget management covers various aspects of business operations, including business budgets, investment budgets, financing budgets, and financial budgets. The aim is to control key business indicators, reduce costs, and achieve centralized financial management.
Keywords: sewage treatment enterprise; budget management; control.
I. Introduction
Background of the Study
China is one of the many water-scarce countries, with 90% of urban water bodies being polluted [1]. According to the "Twelfth Five-Year Plan for National Environmental Protection" in China, the country aims to "reduce the emissions of chemical oxygen demand and ammonia nitrogen" to improve urban sewage treatment levels. Efforts are being made to increase the construction of sewage pipe networks, promote rain and sewage diversion, accelerate the construction of sewage treatment plants in counties and key towns, and by 2015, approximately 160,000 kilometers of new urban sewage pipe networks and a daily sewage treatment capacity of 42 million tons will be added nationwide, ensuring that all counties and key towns have sewage treatment capacity, and increasing the sewage treatment facility utilization rate to over 80%, with an urban sewage treatment rate reaching 85% [2].
Motivation for the Study
Comprehensive budget management is a management system that allocates, assesses, and controls various financial and non-financial indicators of profit centers using budgets to effectively organize and coordinate a company's production and operation activities, achieve established business goals, and analyze and monitor budget execution, as well as assess and evaluate budget performance.
This article takes the Beijing Economic and Technological Development Zone X District Sewage Treatment Plant as an example to explore the construction of a comprehensive budget management system for municipal sewage treatment plants.
Objectives and Significance of the Study
For a sewage treatment plant, it primarily analyzes, predicts, and makes decisions regarding various aspects such as revenue, operating costs, cost per ton of water, and collection based on the company's strategic objectives. Comprehensive budget management covers various aspects of business operations, including business budgets, investment budgets, financing budgets, and financial budgets. The aim is to control key business indicators, reduce costs, and achieve centralized financial management.
II. Introduction to the Comprehensive Budget Management System
The budget is the result of planning work. It not only represents the concretization of decisions but also serves as the basis for controlling production and operation activities. A comprehensive budget is an organic whole composed of multiple interrelated budgets. Once financial objectives are determined, a company must compile budgets according to the constraint relationships among the various budgets in a prescribed process. Comprehensive budget management is a management system for predicting and controlling a company's future situation in its operational, investment, and financial activities.
III. Design of the Comprehensive Budget Management System
In this article, the Beijing Economic and Technological Development Zone X District Sewage Treatment Plant is studied, and based on the strategic objectives for 20X8, a comprehensive budget management system is constructed, and recommendations are provided.
Overview of the Beijing Economic and Technological Development Zone X District Sewage Treatment Plant
The Beijing Economic and Technological Development Zone X District Sewage Treatment Plant is a
conventional activated sludge treatment plant with a daily sewage treatment capacity of 30,000 tons. It officially began commercial operation in August 20X5 and mainly handles industrial wastewater and domestic sewage generated within the development zone, with industrial wastewater accounting for 80% of the inflow and the remaining 20% being domestic sewage.
The strategic objectives for 20X8 are as follows: fulfill social responsibilities by ensuring safe operation and meeting emission standards; achieve returns for investors by increasing profitability and timely collection of water fees.
Specific Preparation Requirements
(1) Annual Operating Plan
Predictions for the next year's water volume, water price, and operating costs, with an analysis of the reasons for any variations and corresponding measures to address potential issues.
Forecast for the collection of accounts receivable:
Analysis of the previous year's collection situation.
Estimated collection for the current year, potential issues, and corresponding measures.
Improvement targets: The sewage treatment plant should set annual management improvement targets, including cost, labor efficiency, and commercial operation time.
Main work plan for the next year, including:
Allocation of human resources:
Changes in personnel: number, positions, reasons.
Changes in personnel costs.
Detailed work plan for achieving budget objectives.
(2) Financial Budget
Prepare financial budgets based on the operating plan.
The financial budget includes operating budgets, investment budgets, and cash flow budgets.
Selection of budget indicators:
Revenue: Revenue = Water Volume × Unit Price. The water volume is the inflow into the treatment plant through the pipe network and is usually beyond the control of the plant, which can only be calculated based on the actual quantity. The unit price is the unit water price stipulated in the agreement, which is adjusted based on a specific formula as the prices change. It is also beyond the control of the plant. It is estimated that the average daily inflow in 20X8 will be 44,101 tons, due to the expected increase in the number of enterprises entering the zone and the improvement of production capacity for existing enterprises.
Potential issue: The installation of online flow meters for effluent and inflow will result in significant differences between the two. The difference is due to the fact that the previously measured filtrate from the dewatering machine and backwash water are recycled and counted in the inflow, and the water used for greening in the plant is from the disinfection tank. This will have a certain impact on the charges, and attention should be paid when considering modifications to the service agreement.
Payment costs: Payment costs include electricity costs, labor costs, chemical costs, sludge disposal costs, laboratory expenses, and routine maintenance expenses.
(3) Total Operating Costs
"Total operating costs" = Total payment costs + Management expenses (excluding depreciation) + Operating expenses (excluding depreciation) + Financial expenses.
(4) Total Cost
Total cost = Total operating costs + Depreciation + Amortization.
Depreciation and amortization are non-cash expenses and are not included in operating costs.
(5) Key Financial Indicators
Key financial indicators include the operating income margin, operating profit margin, return on total assets, return on net assets, and cost per ton of water.
(6) Key Performance Indicators
Key performance indicators include the water fee collection rate, the management expenses ratio, the operating expenses ratio, and the per capita revenue per employee.
IV. Conclusion and Recommendations
Comprehensive budget management, guided by a company's strategic objectives, enhances overall management and operational efficiency through activities such as budget formulation, execution, control, evaluation, and incentives. It is an important management method and mechanism for maximizing company value. Therefore, as an important part of modern corporate systems, comprehensive budget management is an important management method and mechanism [4].
Based on the research analysis, recommendations are made for the performance evaluation system. The budget evaluation system is considered the lifeline of budget management. Comprehensive budget management is a comprehensive engineering project that requires the participation and coverage of all employees, as well as comprehensive tracking and control. To ensure the comprehensive achievement of budget objectives, strict budget evaluation methods should be established, performance evaluations based on the results of responsible departments should be implemented, and the enthusiasm and creativity of managers and employees should be maximized to achieve the company's strategic objectives.