Budgeting is a key component in management short and long term planning?
Budgeting is a key component in management short and long term planning?
Contents
Introduction ………………………………………………………………………… 3
Budgeting management in short and long term planning …………………….. 4
Summary …………………………………………………………………………… 5
Comment …………………………………………………………………………… 5
References …………………………………………………………………………. 6
Introduction
Budget is an estimation of the expenses and revenue over a specific period of time. It can help entity to forecast the expenses and revenue to assess whether the entity has sufficient cash for daily operations or extra cash so that they can figure out how to divide it among the entity for better use. E.g. for new project, buying new equipment or expand the company. It is a plan to tell the entity how much they earn and what they can use for future and try to stay within the set limits. By doing up a budgeting, the company will be less likely to overspend and meet their goals.
Budgeting can use as a planning and controlling system for the company to meet their goals. Budgeted result and actual result can be compared through quarterly or monthly report. A budget features consist of policies, data, documentation and period specific. Most company may prepare many sub-budgets like sale budget, production budget and administration budget to be consolidated into master budget. A master budget is made of budgeted profit and loss account, budgeted balance sheet and a budgeted cash flow statement. The company can use the reports to control operations and expanses and take necessary corrective actions if required.
Budgeting information can assists a company to make decisions. For examples, the amount of money to be invested, the number of employees required, and the marketing strategies required. Company usually will come out with long-term and short-term plans to help to meet the company goals and to conduct ongoing evaluations of its performance.
Budgeting management in short and long term planning
The short term budgeting is
Contents
Introduction ………………………………………………………………………… 3
Budgeting management in short and long term planning …………………….. 4
Summary …………………………………………………………………………… 5
Comment …………………………………………………………………………… 5
References …………………………………………………………………………. 6
Introduction
Budget is an estimation of the expenses and revenue over a specific period of time. It can help entity to forecast the expenses and revenue to assess whether the entity has sufficient cash for daily operations or extra cash so that they can figure out how to divide it among the entity for better use. E.g. for new project, buying new equipment or expand the company. It is a plan to tell the entity how much they earn and what they can use for future and try to stay within the set limits. By doing up a budgeting, the company will be less likely to overspend and meet their goals.
Budgeting can use as a planning and controlling system for the company to meet their goals. Budgeted result and actual result can be compared through quarterly or monthly report. A budget features consist of policies, data, documentation and period specific. Most company may prepare many sub-budgets like sale budget, production budget and administration budget to be consolidated into master budget. A master budget is made of budgeted profit and loss account, budgeted balance sheet and a budgeted cash flow statement. The company can use the reports to control operations and expanses and take necessary corrective actions if required.
Budgeting information can assists a company to make decisions. For examples, the amount of money to be invested, the number of employees required, and the marketing strategies required. Company usually will come out with long-term and short-term plans to help to meet the company goals and to conduct ongoing evaluations of its performance.
Budgeting management in short and long term planning
The short term budgeting is
References: 1. Budgeting. (n.d.). In Encyclopaedia of Small Business online. Retrieved from http://www.enotes.com/budgeting-reference/budgets-budgeting-178308 2. Entrepreneur online Retrieved from http://www.entrepreneur.com/encyclopedia/term/82266.html 3. John R. Dyson. (2010). Accounting for non-accounting students (8th ed.) Great Britain, UK: Financial Times Pitman