ACCOUNTING FOR MANAGERS

Accounting for Managers



Executive Summary

Corporation around the world gives high importance to the formation, construction, planning and execution of a well-developed budget for a variety of reasons. This assignment looked into several features, and underlying advantages that a budget causes around the organization once it establishes. A carefully planned budget is once that translates and transforms the objectives and goals of the organization into data, which is realistic, measurable and specific. Budgets are also a tangible and quantifiable tool to measure performance. An excellent budget undoubtedly gives a clear-cut direction to the company and specifies its way to the attainment of the organizational objectives. The implementation of a budget is a complex task, which requires the services of an extensive human resource along with requiring a clear perception about individual roles in the delegation and execution of their duties. The communication of budgets is significant because each employee can only contribute towards the achievement of the goals if he or she acquainted with the budget in an understandable manner. This directs the company into a specific way, and projects what the company needs to do in order to achieve its strategic objectives for profitability and objectivity. When individuals know about their roles in the organization and the key duties they have to perform, they can prioritize their contributions to the organization and serve them in an efficient manner. A well managed budget becomes a more forward-looking document that can assist management at all levels to identify trends, predict year-end results and avoid any unpleasant financial surprises. The budget is a critical component of the annual marketing plan and communications plan; which serves as a map to ensure that the organization effectively reaches its goals. Hence, the communication of the budget is as important as its formation in the first place.

Table of Contents

Executive Summaryii

Introduction1

Main Body2

“An Excellent Budget Process Is the Ability to Convert Objectives into Data”3

“Finding the resources to implement the budget calls for extensive use of human resources and involves correct perceptions of individual roles and communication play an important role”7

Extensive Use of Human Resources7

Perceptions of Individual Roles9

Significance of Communication in the Implementation of Budget10

Differences between Communication Flows when Budgeting Process is Imposed or Participatory10

Conclusion13

References14

Introduction

A Budget is a synthesis of an organization which is formalized and quantified (after discussion and negotiation between the top level management and the managerial levels), resulting in an action plan for over a year. It matches the expected results of the organization with the resources available to achieve those objectives; in line with the medium-term missions and corporate strategy of the organization. A budget channelize the resources of a company, categorizing and prioritizing different areas of the company interests which needs expenditures, in order to improve upon the sustenance of the organization at large. This directs the company into a specific way, and projects what the company needs to do in order to achieve its strategic objectives for profitability and objectivity. The objectives of the company given a data form, through the ...