Pros And Cons Of Zero-Based Budgeting

By managing the budget the organization will be better prepared for the financial forecasts, which are the company’s future expenses. Some strategies and tools that will assist with managing the budget are zero based, activity based, performance based, cost

The budget process is a powerful planning tool for government to make important resource decisions. According the Carney and Schoenfeld‘s article on How to read a Budget, an operating budget is a reflection of government’s financial plans. When a budget is

Program planning is a process to achieve a particular goal and/or mission. Program planning is an organized process through which a set of coordinated activities or interventions is developed to address and facilitate change in some or all of the identified problems. Program evaluation provides useful information for improving the programs and the service delivery systems. Program evaluation is to improve the program planning, effectiveness, design, and efficiency. The two are different processes, but ideally they hold the same goals and/or mission. The evaluation process takes place after the planning of a

Lastly, we have the program budget, which designate funds to groups that need to achieve specific goals. Program budgets do not allocate funds to company departments, but to company’s activities. Program budgets are very difficult because there are no specifics to go on, they usually have to go by an estimate, and try to cover all aspects of possibilities (Halliman, 2006).

A budget is an instrument used to help managers ensure that the resources used effectively and proficiently toward the goals of an organization. A budget projection can be made on a yearly base depending on previous year or existing one. They can further be broken down quarterly or monthly depending on it use. Generating a budget is complex undertaking, and for a budget to be effective the organization ought to follow it strictly. However, no matter how closely a business follows their guidelines there will always be some form of variances. The organization should expect a few variances and be able to work these discrepancies in any budget

Program planning is the implementation of evaluation process. It is the groundwork where priorities are decided and the results are analyzed on a measurable scale.

BKB program Budget, one of them was doing counseling about nutrition balanced on parents of children 2-4 years of age by presenting a nutritional doctor. The post is OLD and Jasmine have a meeting every month twice in week 3 and 4. This makes communication between the cadres and the parents went smoothly because of doctors who are experts in providing knowledge of nutritional balance. In addition the post OLD Jasmine posyandu and BKB integrates with also help further optimize knowledge of parents in early childhood parenting

According to the West Virginia state constitution, the body in charge of the county finances is the County Commissions in the state, specifically stating, “…(having) the superintendence and administration of the internal police and fiscal affairs of their counties, including the establishment and regulation of roads, ways, bridges, public landings, ferries and mills, with authority to lay and disburse the county levies.” However, the constitution doesn’t say how the counties are to do this. Jefferson County, the subject of my study, is the only county in the State of West Virginia to use Zero Based Budgeting. Zero based budgeting is a budgeting method where all expenses have to be justified for each new period, because they are reset to 0.

Budgeting is the systematic method of allocating financial, physical, and human resources to achieve an organization’s strategic goals. Budgets are utilized by for-profit and non-profit organizations to monitor the progress towards the goals, assist in the control of spending, and help predict cash flow for the organization.

Budget formulation and use are tools that guide many decision making strategies in business. The measures that are least effective could create an avalanche of catastrophic events that can negatively impact the decision making strategies. It is in the best interest of the pertinent parties to draft an operating budget based on a collective set of information relating to organizational vision and mission. Ineffective measures can be catastrophic based on the foundation for measures used in creating the budget. Among the many issues organizations face that relates to creating an effective operating budget results from poor

The 20’s century saw the use of budget involve due to a change in the environment. Indeed the control of output used to be obtained by the dissemination of tasks and so traditional budgets were very much highlighted, with a significant top-down influence. As an example of the importance of budget in the 1970’s IBM had about 3,000 people involved in their budgetary process. During the same period, the oil crisis brought concerns about rising in costs and led to the introduction of zero-based budgeting (ZBB), which can lower cost by avoiding blanket increases or decreases to a prior period’s budget. The increase in business uncertainties was in discrepancy with the stifling effect of fixed plans, promoting the use of rolling budgets. The 1990’s saw the growing influence of shareholders and steered the focus on a budget that included a wider view of organisation results, answering the investment community for quarterly updates on results and expectations (Bill Ryan, 2005). Budgets then started being used as a communication tool between the financial community and the organisation, allowing the corporation to be integrated in the capital market. Moreover companies started using flexible budgets rather than static budgets as nowadays various levels of activities can be observed in most organisations. The use of flexible budgets then enables firms to be consistent with their new environment and the market.

Traditional budgeting method analyses financial index by organization structure, while ABB could put financial index to every activity person by the activity characters and make the person responsible to the index. So that it could allocate the scarce resource more efficiently.

Activity based budgeting (ABB) is a method of budgeting where the activities that incur costs in every functional area of an organization are recorded. Their relationships are defined and analyzed. Activities are tied to strategic goals, after which the costs of the activities needed are used to create the budget. Activity-based budgeting involves determining which activities incur costs within an organization, establishing the relationships between them, and then deciding how much of the total budget should be allocated to each activity. Activity-based budgeting is a planning system which costs are associated with activities, and budgeted expenditures based on the expected activity level . These activities are organized according to the company 's goals, and the costs of each are organized to compile the budget. ABB contrasts with traditional budgeting, which usually simply increases the previous year 's budget to account for inflation or revenue growth, ABB seeks out new opportunities and allocates resources in the budget based on them. ABB provides opportunities to align activities with objectives, streamline costs and improve business practices. ABB is a more accurate way to forecast budgeting.

P4. Explain the advantages and disadvantages of different types of planning tools used for budgetary control.

Budget and budgetary control practices are undeniably indispensable as organizations routinely go about their business activities and operations. These organizations are constantly on the alert on how actual levels of performance agree with planned or budgeted performance. A budget expresses a plan in monetary terms. It is prepared and approved prior to a particular budgeted period and explicitly may show the income, expenditure and the capital to be employed by organizations in achieving their goals and objectives.