Question

In: Accounting

Explain the importance of the budget process and identify who should be involved in the process...

Explain the importance of the budget process and identify who should be involved in the process and why.

Solutions

Expert Solution

ANSWER:-

In order to make effective decisions & coordinate decisions & actions of various departments, businesses need to have a plan for profitability. Typically a business creates a budget annually which, once approved, becomes Annual Plan.

There are Budget serves several purposes:

  • It is a means for Executive Management to gain consensus on how year’s resources are going to be allocated towards realization of companies quantifiable goals for year.
  • A Goal Setting Exercise.
  • The Provides a Metric for Assessing Company Performance.
  • Acts as an Approval Process.

Involved in process & why.

Management buy-in is essential both in planning process & during year to monitor & manage actual performance. One purpose of budgeting exercise is to achieve consensus by everyone even though they are all competing for same resources. It is not possible for everyone to be able to add all headcount they desire / spend amount of money they would prefer. In addition, each department has a different perspective on what is necessary to achieve company’s goals & importance of their contribution. By end of the process, everyone will have had to compromise & should understand where their interests all intersect with company’s goals.

please rate my answer...


Related Solutions

Explain the importance of the budget process and identify who should be involved in the process...
Explain the importance of the budget process and identify who should be involved in the process and why.
Who should be involved in the budgeting process? Who is responsible for ensuring the budget is...
Who should be involved in the budgeting process? Who is responsible for ensuring the budget is met monthly, annually? How might this differ between organizations/industries? Describe why ethics are important in the budgeting process.
Who should be involved in the budgeting process? Who is responsible for ensuring the budget is...
Who should be involved in the budgeting process? Who is responsible for ensuring the budget is met monthly, annually? How might this differ between organizations/industries? Describe why ethics are important in the budgeting process.
At what point in the budget planning process should production be involved?
At what point in the budget planning process should production be involved?
Identify someone who is currently involved in the drug development process. This person could be any...
Identify someone who is currently involved in the drug development process. This person could be any of the following: A physician, nurse, or study coordinator who is doing or has done clinical research An employee of an IRB, Pharmaceutical Company, Biotechnology Company, or CRO Employee of the FDA Request to set up a meeting (in person or via teleconference) to discuss their job/experience as it relates to the drug development process. n two pages summarize your interview, include information such...
explain what a work schedule is and who should be involved in its development and review....
explain what a work schedule is and who should be involved in its development and review. 180 words
Should nurses at the bedside (involved in direct patient care) be involved in the unit budget...
Should nurses at the bedside (involved in direct patient care) be involved in the unit budget process? Explain your answer and provide rationales with examples from clinical practice (such as staffing, patient outcomes, equipment, etc.).
Explain the importance of consolidation process
Explain the importance of consolidation process
What is the value of budgeting? Who should prepare the budget(s)? How does the budgeting process...
What is the value of budgeting? Who should prepare the budget(s)? How does the budgeting process begin – where do the numbers come from? How often should the budget be revised? What is the purpose of budget performance reports? How are budget variances calculated? Which budget variances are the most important? How will variances help management assess performance?
Name who is involved in the capital investment decision process
Name who is involved in the capital investment decision process
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT