Budgeting Is A Essential Component Of The Operations Of Any Business

If you work this problem as a group assignment, each group member should be prepared to

In accounting there is much to be learned, about the financial aspects of a business. In the past five weeks I have learned the importance of financial reports and how they relate to the success of an establishment. These reports may include balance sheets and income statements, which help accountants and the public grasp the overall financial condition of a company. The information in these reports is really significant to, managers, owners, employees, and investors. Managers of a business can take and deduce financial

The budgets process could help to spread resoursces that increase the skill to get best outcome.

Budgeting systems turn managers’ perspectives forward and by looking to the future and planning, managers are able to anticipate and correct potential problems before they arise (Horngren, Foster & Datar, 2000). Through budgeting, management can plan ahead and maintain enough cash to pay creditors, to have adequate raw materials to meet production requirements, and to have sufficient finished goods to meet expected sales (Kieso, 2002).

The following report includes selected financial data analyzing the performance of our company Life Through the Lens for year 12. Included is our strategy for the current year, future initiatives for our four regions, our competitor analysis, and reasons our company has not been improving as well as we had projected. At the moment our company’s current position is not up to par with our previous years regarding where our company is standing among our competitors. Please refer to Table 1.0 above to further understand our company’s performance for the end of year 12.

Assets and liabilities are bifurcated in current and non-current. Current asset is defined as any asset which can be converted into cash readily and will be used within one accounting period normally 1 year e.g. Receivables, Inventory, Prepaid Expenses.

The budgeted income statement, cash flows, and balance sheet follow in order. The income budget relies on the revenue and expense forecast from the operating budget, while the budget cash flows are planned for financial and investment activities. A final component of the budget process, the projected balance statement, can be used to tie in all the budgeting dependencies. Once a budget has been prepared, evaluation can be expected before approval. Budgetary components may require several iterations before finalizing the organizational budget.

Budgeting in a business is important for so many reasons. Business leaders often deal with large amounts of money, and some employees or outsiders might see the organization's revenue as nearly limitless. Regardless of the business cash on hand, though, careful budgeting plays a critical role in any organization's success. Chester & Wayne is a large regional food distribution company and the CEO of the company has asked for some assistance in preparing a budget for their cash flow. With the information provided by CEO, Mr. Wayne, the budget will be carefully planned.

Having a formal and structured budgeting process is the foundation for good business management, growth and development. Very similar to our personal finances, discipline and planning should be the cornerstone of a business budgeting process.

The purpose of this assignment is to increase your understanding of the information contained in a firm’s financial statements and of the relationship between the statements. As you study financial accounting, we will focus on using financial information in a meaningful way, to understand the firm’s past performance and project its future performance.

A budget is an itemized summary of what a business’s income and expenses will be for a given period of time, while allowing the business during this period to determine if they are able purchases items based on their budget. It’s an important tool that is used by management to help prioritize their spending and manage their money and allow them to identify any wasteful expenditure, respond quickly to any financial changes and to achieve their

Budgeting is crucial in the well-being of a company especially the financial health status of a company. In fact, no professionally managed firm would fail to budget, since the budget establishes what is authorized, how to plan for purchasing contracts and hiring, and indicates how much financing is needed to support planned activity. It is routine for a company to budget for its expenses. Expense budgets act as a guideline of how much revenue a company would require keeping the activities running. It is used to set the company’s targets for a certain period.

Knowing what resources are available is important for an organization to function. The organization runs the risk of depleting resources or not using their resources effectively to accomplish the organizations mission if resources are not accounted for. According to Dr. Dean’s PowerPoint, budgeting is “the administrative activity of planning that determines what resources are needed and how they should be supplied/applied.” It should be noted that a budget is a planning tool. According to Robert Welch, “the administrative activity of budget was listed last of the seven elements that made up the process of planning,” he proposes his reasoning, “For if planners seek the mind of God in establishing their objectives and the parameters…then money will not be a problem because God will empower that which He wants done in the church or religious organization” (Welch, 167). It is wise for a church to develop a budget, thereby ensuring that they are being good stewards of their resources.

Planning: A budget provides a detailed plan of action for a business over definite period of time. Detailed plans relating to production, sales, raw material requirements, labour needs, advertising and sales promotion performance, research and development activities, capital additions etc., are drawn up. By planning many problems are anticipated long before they arise and solutions can be sought through careful study. Thus most business emergencies can be avoided by planning. In brief, budgeting forces the management to think ahead, to anticipate and prepare for the anticipated conditions.

Nchite and Nsana, (2004): Public Finance Management and Utilization Project- Report on strategies and Mechanisms of an effective system of public finances management in Zambia.