By Robert G. Finney
Now readers can collect the budgeting knowledge had to grasp the budgeting process--without an accounting historical past. This concise advisor presents readers with all of the talents they should perform the budgeting approach and switch it right into a strong decision-making software.
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Additional resources for Essentials of Business Budgeting (Worksmart Series)
It shows the resources needed and how they will be used. Business resources are people, particular skills, machines, work space, and money. The budget communicates the real objectives and priorities for the year, because work will not get done if resources are not budgeted for it. Say you are in an engineering design unit and have heard enthusiastic plans for a new widget. However, if you see no money in the budget for its design, you know it is not a priority project. All elements of the company are measured on performance relative to budget, have to explain deviations from budget, Page 2 and probably cannot get activities approved that are not in the budget.
Such a framework lets them understand cause and effect, the parts of their budget submission that will be changed by requirements different from what they assumed. Thus the changes that probably will flow from the budget reviews will be easier to accomplish. Page 36 Chapter 5 handling Uncertainty Managers live and work in the future, and the future is always uncertain. Beyond that, many factors that have important effects on their organizations are uncontrollable. The biggest difficulty in developing budgets is the fact that the future is always uncertain.
This and the following use affect unit managers most directly. Higher management uses the budget to control costs and activities. The approved budget is the unit manager's bible. There will be at least monthly review of results versus budget in many companies, and sometimes reference to it almost daily. Every change that comes up, and everything unit managers want to do, will be considered against the numbers in the budget. If their budgets are being met, they can expect relative peace. If budgets are being missed, managers should expect to have to explain and defend the variations, and to be required to develop corrective action.
Essentials of Business Budgeting (Worksmart Series) by Robert G. Finney