"Budgeting is a key component in management short and long term planning

"Budgeting is a key component in management short and long term planning Essay example
College
Essay
Finance & Accounting
Pages 4 (1004 words)
Download 0
Budget Student Name Instructors Name Course University Date of Submission Budget Introduction Budgeting is a term used to refer to the procedure of scheduling, setting aims and objectives for the organization’s management that are required to be attained in a specific period of time (HEITGER, 2008, p.292)…

Introduction

Budgeting helps in figuring out the issues that are faced by the organization and the stakeholders of the organization (RICH, 2012, p.970). This done by finding the difference between the actual outcomes and the budgeted outcomes, if the actual outcomes are not consistent with the budgeted outcomes, the organization is said to have been experiencing issues that need to be resolved. Budgeting is a means through which alternatives are identified and analyze this is done to find the best alternative which will end up in providing fruitful results to the organization. Budgeting is an essential element in the planning role played by the management of an organization. It plays a key role in creating plans that are short and long term in nature. Both the short and long term goals of the organization are of great importance. The achievement of the long term goals is entirely dependent on the successful achievement of the short term goals of the organization. Short Term Planning A manager is involved in the process of making both short and long term planning. The plans that are created for a shorter period of time are created while keeping a deadline of one year or as long as two years in mind (SPEARMAN, 2007, p.194). ...
Download paper
Not exactly what you need?

Related papers

Assigment for Strategic management accounting
The business functions within Pear Ltd’s value chain encompass aspects such as research and development, design of products, services, and processes, production, marketing, distribution, and customer service. As such, cost management is critical component to the company’s operation in integrating and coordinating activities in all spheres of business function. Alternative Methods of Budgeting…
Planning for Long Term Wealth Creation
Before borrowing to invest in the stock market, Albert and Nancy should first build an investment plan that clearly documents their retirement goals of savings and income. After identifying the level of income and savings that they require for their retirement goals, the couple can then develop several investment strategies that are potentially adequate in achieving these goals over time, using…
Capitol Budgeting Long Term Financing
Capital assets receive attention because they commit a firm for long term. These capital assets are commitment of over a year and sometimes for decades for instance, real estate. Economically, the resources being scarce and competitive in nature, there would be wrong allocation of such resources at the wrong time or on a non rewording asset. Assets acquisition analysis According to (Baker, &…
Critically appraise the application of traditional capital budgeting techniques.
At the same time, many business organizations failed to survive stiff market competition and subsequently went out of the market. The last decade witnessed a series of corporate scandals and bank failures due to poor managerial accountability and ineffective corporate governance practices. Hence, today’s managements give particular focus to corporate governance principles and long term business…
Management accounting and control (5-8)
In this context we can comfortably say that knowledge and insights from budgeting are helpful in designing budgetary systems and setting of budgets for organizations (Wildavsky & Swedlow 2001). The ability to effectively formulate budgetary systems and set budgets through insights from budgets is very important for any given form of organization. This is because such tools can be used in the…
planning and budgeting
First, the key factors to consider when making pricing and service decision are considered to include the cost of production, profit mark-up and external factors including prices of competitors. Once the right prices and services are rendered, the facility is sure to have a very firm basis for financial performance. Again, there is consideration on the actual financial planning process, where it…
Financing: Long Term and Short Term
There are two major categories of financing that normally exist in most businesses (Jim, 2011). These categories are short term and long term financing methods. These categories basically differ in the period for which they are provided to the business. For instance, short term financing is a type of financing that is provided for a short period of time, usually not exceeding one year, to the…