Financial and Management Accounting Individual Assignment - Essay Example

Financial and Management Accounting Individual Assignment Table of Content Abstract 4 This report examine the three levels of decision analysis in an organization set up by considering the different managers and other employees who run organisation, and the typical decision they will have to make. The study continues to look at routine, on an operational, tactical, and organisational strategy. The decisions made sorted by working out the information needed to make this decisions thinking about product costing and budgetary control. Application of the factors in the examination of partnership also considered. The study picked on Worplestrop as the case study to look at this factor. 4 Introduction 5 A budgetary and financial are two types of controls in an organization. This study concentrates only on budgetary control in an organisation. The major aim of this report is to analyse the cost and budgetary information systems. Budgetary control according to Cost Management Accountants (CIMA) is establishment relationship of budgets to policy requirement, and the continuous comparison of actual with budget results relating the responsibilities of executives to those policies, either to secure by operational, tactical and strategic actions the objective of policy, or a basis for revision (Banerjee 2006). The major goal of the report is to outline the product cost and budgetary control methodologies and systems that can be used by Worplestrop and give recommendations of most appropriate information outputs to support management decision making at each of operational, tactical, and strategic levels. Then give a sample of the routine and “on-demand” statements that might be made available to employees who need them. 5 Purpose of costing and information systems 5 As seen earlier, the main purpose of budgeting control and information systems is to indicate and explains the formal statement of financial resources set out to carry activities in time. It coordinates the activities of the organisation. Budgets are link to cost centres through different responsible key individuals who control actins on a daily to day activities, organise the budgets in those cost centres and revise the original budgets this enable manager of all levels to monitor organisational functions. 5 Product Cost and Budgetary Control Methodologies and Systems 6 In every business planning, budgeting is the most valuable function to perform. Planning involves comparing the actual performance with the standard performance budgetary is the parameter to compare actual and expected performance (Hofstede G. H., 2003). Budgets prepared by operational, who report them to the tactical managers and forward them to strategic manager for review to help in performance. This prepared in advance at any period. Budgets prepared to check availability of finances in an organisation comparing the demands of the projects. All levels of management prepare budgets as a tool to measure and control cost and maximise profits. 6 Essential features of budgets in an organisation are to prepare them in advance and based on future action plan. Relating 'to a future period and based' on the objectives to be achieved in that time. It is a statement which should be expressed in monetary to the policies of all levels of management. Main objectives of firms ‘to maximise profit and minimise cost'. This is what makes a convincing budgeting system beneficial activity in an organization (Banerjee 2006). Strategic manager use budgets to bring economic activities in a business by looking at opportunities, political, social, technology and environmental factor. Budgetary control is essential through applying systems of management and accounting controls to achieve proper profits. 6 The essential of budgeting control is to establish budgets, operational managers on their part, will draw budgets to establish what they will use in the cost of the items and pass this to the tactical manager to analyse the budget in terms of cost and availability of funds. This sent to the top executive level management. Strategic managers’ reviews the budget to identify the opportunity cost of those budgets drawn and approve them when the opportunities are viable to run the business. The other essential task of budgeting control is to execute responsibilities in order to perform a task to attain the objective of the organization (Hofstede G. H., 2003). The responsibilities passed to each level of management through strategic management to operational management. Strategic manager will be a concern with the bigger picture of the organisational goal by focusing on the strategic decisions which are mostly external factor such as political, environmental, economical, social and cultural to the business and the future. This is done through forward thrust in the business. Decisions concern issues mission, vision, policies and strategic blue print. Tactical management in this context involved in tactical decisions on how to achieve overall business strategic goals. This will assist in the implementation an example of procurement department involved in sourcing and compliance issues. Operational managers mandated is on how they will deploy resources to each level helping to run the office and operation activities. They will address issues of how money needed to be spent in a month and how procedures followed. They set timings on delivery issues in the context of a procurement department. 7 Another area of budgetary control is to look at continuous comparison of actual performance with standard performance (Banerjee 2006). Strategic management level involved on area of where the organisation headed, and business competency. They will spearhead the overall performance of budgets at compliance issues concerning those budgets. Tactical management involved in creating strong decision making about long term vision and the day today activities. They have to have a number of missions on issues concerning the allocation of funds to personnel below them. In the context of procurement department, they pay attention to decisions of integrity and discipline by comparing the actual performance measures and expected performance. Operational management, on the other hand, runs the budgets on a day to day work set up. They consider how activities get done with the actual performance putting in mind the standard performance. They also get involved in decisions of real time, and the results needed to make an adjustment or change to actual performance and desired outcomes. 8 Issue of corrective action in the budgetary control addressed if there is any diversion on the budgets. Strategic management involved with decisions concerning future orientations and identify opportunities which an organisation can derivate. They look at where the business is headed and take corrective actions of addressing those issues (Hofstede 2003). Tactical management are involved in decisions concerning issues of moving from short and long term goals. This helps the managers in this to stay focused on the long terms rather than the short term goals. If they detect any diversion from the long term objectives, they move fast to correct them to achieve the mission of the organisation. Operational manager at this level help in the day to day activities in correcting the issues at hand before long. In the context, of procurement department this manager will make sure that delivery of goods and services are received to avoid unexpected risks. 9 The last essential budgetary control is in this report is the revision of budgets. Budgets ones drawn is affected with many factors needing revision. Strategic management will be looking for opportunities which in most cases affects overall budgets, their decisions will involve directing the revisions to suite those opportunities. Tactical managers will assist in areas to achieve the overall strategic goals. Operational management will help in decisions to incorporate the changes of revisions on day to day activities. 9 Steps involved in the installation of budgeting control requires an organisation to take care questions like what is likely to happen, what objectives to be achieved, and how cost should be minimized. 9 10 Organisation should have proper charts from where authority and responsibilities gets cleared. If charts in organizations are not clear there might be conflict of interest among employees. Every person will be answerable to their performances if duties are clear (Reynolds & Vince 2007). 10 Conclusion 10 In conclusion, it is evident that the budgetary control and information systems are indispensable. The usefulness is evident in controlling all level of management the relay decision making in an organization. They, therefore, significantly contribute to control of the entire organisation. 10 Abstract This report examine the three levels of decision analysis in an organization set up by considering the different managers and other employees who run organisation, and the typical decision they will have to make. The study continues to look at routine, on an operational, tactical, and organisational strategy. The decisions made sorted by working out the information needed to make this decisions thinking about product costing and budgetary control. Application of the factors in the examination of partnership also considered. The study picked on Worplestrop as the case study to look at this factor. Introduction A budgetary and financial are two types of controls in an organization. This study concentrates only on budgetary control in an organisation. The major aim of this report is to analyse the cost and budgetary information systems. Budgetary control according to Cost Management Accountants (CIMA) is establishment relationship of budgets to policy requirement, and the continuous comparison of actual with budget results relating the responsibilities of executives to those policies, either to secure by operational, tactical and strategic actions the objective of policy, or a basis for revision (Banerjee 2006). The major goal of the report is to outline the product cost and budgetary control methodologies and systems that can be used by Worplestrop and give recommendations of most appropriate information outputs to support management decision making at each of operational, tactical, and strategic levels. Then give a sample of the routine and “on-demand” statements that might be made available to employees who need them. Purpose of costing and information systems As seen earlier, the main purpose of budgeting control and information systems is to indicate and explains the formal statement of financial resources set out to carry activities in time. It coordinates the activities of the organisation. Budgets are link to cost centres through different responsible key individuals who control actins on a daily to day activities, organise the budgets in those cost centres and revise the original budgets this enable manager of all levels to monitor organisational functions. Product Cost and Budgetary Control Methodologies and Systems In every business planning, budgeting is the most valuable function to perform. Planning involves comparing the actual performance with the standard performance budgetary is the parameter to compare actual and expected performance (Hofstede G. H., 2003). Budgets prepared by operational, who report them to the tactical managers and forward them to strategic manager for review to help in performance. This prepared in advance at any period. Budgets prepared to check availability of finances in an organisation comparing the demands of the projects. All levels of management prepare budgets as a tool to measure and control cost and maximise profits. Essential features of budgets in an organisation are to prepare them in advance and based on future action plan. Relating 'to a future period and based' on the objectives to be achieved in that time. It is a statement which should be expressed in monetary to the policies of all levels of management. Main objectives of firms ‘to maximise profit and minimise cost'. This is what makes a convincing budgeting system beneficial activity in an organization (Banerjee 2006). Strategic manager use budgets to bring economic activities in a business by looking at opportunities, political, social, technology and environmental factor. Budgetary control is essential through applying systems of management and accounting controls to achieve proper profits. The essential of budgeting control is to establish budgets, operational managers on their part, will draw budgets to establish what they will use in the cost of the items and pass this to the tactical manager to analyse the budget in terms of cost and availability of funds. This sent to the top executive level management. Strategic managers’ reviews the budget to identify the opportunity cost of those budgets drawn and approve them when the opportunities are viable to run the business. The other essential task of budgeting control is to execute responsibilities in order to perform a task to attain the objective of the organization (Hofstede G. H., 2003). The responsibilities passed to each level of management through strategic management to operational management. Strategic manager will be a concern with the bigger picture of the organisational goal by focusing on the strategic decisions which are mostly external factor such as political, environmental, economical, social and cultural to the business and the future. This is done through forward thrust in the business. Decisions concern issues mission, vision, policies and strategic blue print. Tactical management in this context involved in tactical decisions on how to achieve overall business strategic goals. This will assist in the implementation an example of procurement department involved in sourcing and compliance issues. Operational managers mandated is on how they will deploy resources to each level helping to run the office and operation activities. They will address issues of how money needed to be spent in a month and how procedures followed. They set timings on delivery issues in the context of a procurement department. Another area of budgetary control is to look at continuous comparison of actual performance with standard performance (Banerjee 2006). Strategic management level involved on area of where the organisation headed, and business competency. They will spearhead the overall performance of budgets at compliance issues concerning those budgets. Tactical management involved in creating strong decision making about long term vision and the day today activities. They have to have a number of missions on issues concerning the allocation of funds to personnel below them. In the context of procurement department, they pay attention to decisions of integrity and discipline by comparing the actual performance measures and expected performance. Operational management, on the other hand, runs the budgets on a day to day work set up. They consider how activities get done with the actual performance putting in mind the standard performance. They also get involved in decisions of real time, and the results needed to make an adjustment or change to actual performance and desired outcomes. Issue of corrective action in the budgetary control addressed if there is any diversion on the budgets. Strategic management involved with decisions concerning future orientations and identify opportunities which an organisation can derivate. They look at where the business is headed and take corrective actions of addressing those issues (Hofstede 2003). Tactical management are involved in decisions concerning issues of moving from short and long term goals. This helps the managers in this to stay focused on the long terms rather than the short term goals. If they detect any diversion from the long term objectives, they move fast to correct them to achieve the mission of the organisation. Operational manager at this level help in the day to day activities in correcting the issues at hand before long. In the context, of procurement department this manager will make sure that delivery of goods and services are received to avoid unexpected risks. The last essential budgetary control is in this report is the revision of budgets. Budgets ones drawn is affected with many factors needing revision. Strategic management will be looking for opportunities which in most cases affects overall budgets, their decisions will involve directing the revisions to suite those opportunities. Tactical managers will assist in areas to achieve the overall strategic goals. Operational management will help in decisions to incorporate the changes of revisions on day to day activities. Steps involved in the installation of budgeting control requires an organisation to take care questions like what is likely to happen, what objectives to be achieved, and how cost should be minimized. Organisation should have proper charts from where authority and responsibilities gets cleared. If charts in organizations are not clear there might be conflict of interest among employees. Every person will be answerable to their performances if duties are clear (Reynolds & Vince 2007). Conclusion In conclusion, it is evident that the budgetary control and information systems are indispensable. The usefulness is evident in controlling all level of management the relay decision making in an organization. They, therefore, significantly contribute to control of the entire organisation. References Banerjee B., 2006, Cost Accounting Theory and Practice 12Th Ed. PHI Learning Pvt. Ltd. Hofstede G. H., 2003, The Game Of Budget Control. Honolulu. Routledge, 2003 Reynolds M., Vince R., 2007, Handbook of Experiential Learning and Management Education. London, Oxford University Press Read More