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Budgeting - Assignment Example

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This work called "Budgeting" describes the purpose of budgeting, managerial problems, its main aspects. The author takes into account the importance of a budget, its pros, and cos, the peculiarities in the budgeting process, and its development till to this moment…
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Budgeting
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Download file to see previous pages The procedures are more or less the same on all the levels but the degree or the depth to which these matters vary with all the three different levels for example if budgeting fails on the personal level it might not be as hazardous as failing on the nationwide level because that might mean that it would put the whole country in a position of despair and uncertainty and would require massive international credit or aid to help the country to cope with the budget deficit. As with the repercussions the time needed to implement budgeting decisions or to allocate budgets vary on all the three levels, it obviously takes more time to allocate budgets for the whole organization rather than just one individual systematically allocating the funds for his or her personal expenses. Budgets are an integral part of most of the organizations in today’s competitive world, organizations indulge in the budgeting process at different times, usually at the end of a financial period where the strategic management takes the decision in line with the organizational goals and mission. Though companies strictly implement the budgets that have been allocated, they might improvise in the middle of the financial period to cater to the varying needs of the organization, events in the external environment might also prompt an organization to make changes in the budgets for example if an organization feels that a product has failed on the market then it might cut the marketing departments budget because it might not want that certain product to be promoted anymore and can allocate the same amount to some other department, these are known as mini budgets and it is also important to understand that budgeting is done differently for each and every department, for example, the sales department is required to meet new targets each and every month and hence the budgets are allocated on the amount of the target that the sales department is required to achieve and hence the annual budgeting does not apply to the sales department.
The purpose of budgeting, as shown above, is to have allocated funds to the various functioning departments of an organization, the reason that why this is done is to ascertain that the expenses of the firm are in line with the funds available with the organization, in line with the matching principle of accounting. ...Download file to see next pagesRead More
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