ORGANIZATION OF BUDGETING OF INVESTMENT PROJECTS IN ENTERPRISES

Abstract

The article establishes the importance of using structured planning in the implementation of investment projects, which is crucial for business growth and allows you to focus resources on increasing profits, reducing costs and increasing returns from investments. A relevant issue before the enterprises is the organization of budgeting of investment projects, which allows an increase in shareholder’s value and profit, a decrease in expenses and an increase in returns on investment. The aim of this article is to determine the importance of the following budgeting of investment projects as a tool for systematic planning and control at the enterprises for maximization of their profits. To achieve the set goal, the research of scientific works, both foreign and domestic scientists on the issues of management of investment projects was carried out. While analyzing the work of the specialists, it was established that the budgeting process for the company is worth applying a low level of such requirements as completeness, accuracy, clarity, objectivity, timeliness of implementation, and organization of financing in full scope and cost-effectiveness. It was found that separate elements of the budgeting process are widely used in enterprises, but there is a lack of complexity and use of a systematic approach, which significantly reduces the efficiency of budgeting. The author suggests the follow-up actions for implementing the system approach to the budgeting of capital investments and suggested a time-limited process for forming the investment budget. Budgeting of investment projects involves the use of methods of capital budget analysis that can be used to determine the economic feasibility of capital investments. They include the payback period, the period of discount payments, net operating cost, profitability index, internal rate of return and modified internal rate of return. The work proposes the analysis and characterization of methods of evaluation of the budget of capital investments. These methods allow identifying the projects that generate cash flows. Given the complexity of the implementation of the tasks that the high dynamics of the external environment imposes, the management must clearly understand, that decisions on capital budgeting have a long-term impact on the company, its productivity, as well as the decisive importance for its success or failure.