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

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

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). ...Show more

Summary

Budget 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)…
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