Monitor And Control Finances & Review

* assess the basic soundness by judging the budget preparation system against certain internationally accepted standards or "budget principles";

Company use budget to plan, monitor, measure and control the spending. The budget is an outline that shows expectations for store financial performance.

Organizations should prepare budgets with budget control systems in place. The financial planning of the organizations targeted operation is considered budgeting. There are processes that are essential to protecting the financial well-being of the organization. There are challenges that may arise within the organization when implementing a budget and budgetary controls.

A budget is a tool used by businesses to plan for upcoming revenues and expenses. Businesses understand the difficulty of planning for the future. Circumstances

A budget is a formal written plan at an organizational level for the outgoing expenses and incoming revenues for a specific period. The purpose of the budget is to ensure that the funds are available to accomplish the objectives of the

Firstly budget can be defined as “a quantitate expression of a plan of action and aid to coordinating and implementing the plan”(Horngren, Sundem and Stratton,2013). To add to this definition Collier(2006) also suggested profit is based on a defined level of activity and it takes into consideration of future time periods. budgets main purpose can be split into assisting managers in control and planning of the firm, moreover it also include sub factor such as acting as a communication device between departments. Furthermore jill collins definition for budgetary control is the process by which financial control is exercise by manager preparing budgets for revenue and expenditure for each function of the organisation in advance of accounting period. It also involve analysis of performance of department

The purpose of this paper is to explore the various stages of the budgeting process and attempt to evaluate their effectiveness. I will further evaluate the level and validity of detailed assumptions used to create budget estimates. I will discuss the role of the budget as an analytic tool and explain how the budget can be used to evaluate organizational performance, eliminate inefficiencies in an organization's performance, and explain the budget's role in the business control cycle. I will further analyze control mechanisms that can be put in place to monitor and evaluate the budget, and describe how budget can be used in the performance accountability and reward process. Finally, I will identify a major business initiative in my

Any successful endeavor requires careful planning and controlling actions. Managers should have clearly communicated objectives against which to measure performance, quickly identify variances and take actions to correct as necessary. The budgeting process creates the organization’s operations master plan and is most effective when it engages employees at all levels of the organization.

There are also behavioural problems associated with budgetary control (Demski and Feltham, 1978, page 336) states that “the dysfunctional behaviour thy may induce are well known”, they being budgetary control. In terms of budgets that are inflexible, (Jones, 2006, page 94) speaks of managers using “creative budgeting ” by “ creating slack in the system to give themselves leeway ” this is a way to mitigate shocks to the business, especially in am an unpredictable environment. This may not be ethical but mangers see it as a necessary evil, as their use of the budget tend to be used as a means of assessment and evaluation. As they fight to control the budget, they also fight to maintain their jobs and current position within the firm. Therefore this unsavoury behaviour is created by the use of budgetary control, and where the business environment is unpredictable this behaviour, can become even more damaging to the business as a whole and not just the department itself. It also “creates a use it or lose it mentality that encourage managers to spend their entire budget to avoid a reduction in resources” (Whitecotten et al, 2013, page 328). This unnecessary spending again is costly to the business, as

Budgeting is an important key in the management process. It is essential in the planning, organizing, and controlling. Ultimately the budget function as a control technique not just for cost, but for all resources (Ward Page 63). There are various type of budgets prepare by an organization. They all complement each other.

Budgeting is not only useful for a business organization but it is also useful for personal planning and spending. The existence of a well structured budget within an organization or a personal budget tells how well a person or the business is organized. From a business perspective regardless of the type and size a budget is an important recipe for success and smooth running of the business. The key steps in the operational budget are:-

Budgets are needed by many organisations and have been used since 1922, they’re considered to be key drivers and assessors of performance within a business. They’re mainly used in an attempt to plan and control organisations and their objectives. An organisation’s political structure is mainly affected by budgets as the managers at the top tend to use budgets as a means of power and authority. Traditional budgeting has both advantages and disadvantages; recently, critics seem to be against the use of traditional budgets within organisations. This is due to traditional budgeting being assumed to be very out of date; it has no way of being used in a contingency plan as it has nothing to do with the changes of markets. If the market

budget is considered as a standard to facilitate control work activities of the organization. Budgets are planning tools prepared firstly to start the period being budgeted. Valuable information about the performance contains of the difference between the actual results and the planning budgets. Therefore, budgets are both planning tools and performance evaluation.

Strategic planning identifies the products a company intends to develop, projects which management intend to pursue to meet the organization’s overall goals. Budgets are derived from these and are specified in terms of a manager’s responsibility.

The main responsibility of manager is planning for the future by deciding what should be done and how it will be achieved. Budget is such a formalized system of planning, forecasting, monitoring and controlling the use of resources which help the managers to achieve organization's objectives both in public sector and private sector. Budgets fulfill a number of roles in the management of organizations and different roles may cause some conflicts. Here, we will identify the principal roles of budgets and have a briefly comment on the compatibility of these differing roles.