Budgeting Process - 1488 Words

Budgeting Process Budgets are often met with much hesitation. Often times, managers feel that the process is often too long and really does not help them run their departments or business. Let ¡Ã‚ ¦s explore the various stages of the budgeting process and evaluate their effectiveness. Then review how the role of the budget could serve as an analytic tool and be used to evaluate organizational performance, eliminate inefficiencies in an organizations performance, and be a part of the business control cycle. How can a company go from point A to point B? According to Leading Edge Alliance, a budget is like a roadmap for business growth or driving directions (2007). What does budgeting entail? The Process Budgeting is the process of: identifying,†¦show more content†¦Again, more information can help provide a clearer picture of future results. Summarizing is the part of the budgeting process that entails relating the short-term activities to the company ¡Ã‚ ¦s long-term goals and establishing performance measures in relationship to budget activity. Finally, communication during the entire process is critical to the company. Budget information must be communicated to the individuals who are accountable for a particular department. Remember it is the directions that will allow them to take their department from point A to point B. Management can set expectations and coordinate the activities. It is at this point, that management can challenge and motivate their staff with the establishment of performance measures that have rewards tied to them (Cingoranelli, 2006). Analytical Tool Budgets can also be used as an analytic tool to evaluate organizational performance.  ¡Ã‚ §Budgets are useful because the preparation of a budget forces management to plan. In addition, the budget provides a benchmark against which to compare actual performance ¡Ã‚ ¨ (Marshall, et. al, 2004). Managers are responsible for carrying out plans. They are expected to undertake specific tasks, make the necessary decisions and manage staff. Budgets help to assess levels of successShow MoreRelatedCapital Budgeting Decision Process2039 Words   |  9 PagesCapital Budgeting Decision Process 1. Introduction The maximization of shareholder wealth can be achieved through dividend policy and increasing share price of the mark value. In order to derive more profits, our company shall invest potential investments which always cover a number of years. Those investments involve substantial initial outlay at the outset and the process. The management is responsible to participate in the process of planning, analyzing, evaluating, selectingRead MoreCapital Planning And Budgeting System Process1667 Words   |  7 PagesCapital planning and budgeting is a very vital piece in the Public Budgeting System process. It is an essential implement in the financial management practice and is effective in both public and private organizations. It is the method which consists of the determination and the evaluation of the investments and the possible expenses by an organization. As explicated by Lee, Johnson, Joyce (2008), capital budgets help in determining how much of each form of investment is needed, and it supportsRead MoreCapital Budgeting Process Should Be Utilized1432 Words   |  6 Pagestype of investment(s), in the form of acquisition, and or merger. In the world of business, capital budgeting is one of the most important steps that a company or organization can take. This process is called Capital budgeting. 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Introduction Budgeting is the cornerstone of the management control process in nearly all organizations (Hansen et al, 2003). The purpose of budgeting is to give targets and plans financial value, making the progress easily measurable and to transform the strategic ideas into understandable operative action. (Hanninen, 2013). Yet sometimes budgeting is not as ideal as it is thought. Specifically, traditional budgeting method for the past couple of years arose a lotRead MoreBudgeting Process10662 Words   |  43 Pages(2004): MTEF Manual for Central Government: Zambia. 3. Mudenda Dale, (2005). The budgeting Processes and Economic Governance in Zambia: A Literature Review. 4. Bolnick Bruce, (1995): Establishing Fiscal Discipline: the Cash budget in Zambia. 5. Dinh Hinh, (2000) Cash Budget in Zambia: Stabilizations versus Growth and Poverty Reduction. 6. Mwanawina, I, M, (2002): Transparency and participation in the budgeting process: Zambia Country Report. 7. 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Here are some sort of important stages in budgeting process as follow: Stage 1: Establish who will take responsibility for the budget-setting process It is crucial part to ensure that the committee who responsible to the budget has real authority withinRead MoreThe Decision Of The Budgeting Process966 Words   |  4 PagesThe budgeting process is an approach that needs to be carefully selected, managed, applied and controlled. As the CEO of the company my mission is ensure the right business practices are applied to generate better outcomes to our organization. Our current budgeting process is a popular approach used at many local, sate, or national governmental agencies, and nonprofit organization, which consist on spending at the end of the budget cycle the amount that was not used. Managers tend to do it, as theyRead MoreEssay on Budgeting Process1331 Words   |  6 Pagesintroduction The budgeting process is utilized by managers to calculate and document the costs associated with running and keeping a business operating at a healthy level are estimated, expected revenues are projected, and then decisions are made which define how much debt you are in and how much can afford to borrow, and how much you can afford to spend on new purchases, new employees or new ventures. A budget must be established to measure current financial performance, detect substantial changes