A budget is an instrument used to help managers ensure that the resources used effectively and proficiently toward the goals of an organization. A budget projection can be made on a yearly base depending on previous year or existing one. They can further be broken down quarterly or monthly depending on it use. Generating a budget is complex undertaking, and for a budget to be effective the organization ought to follow it strictly. However, no matter how closely a business follows their guidelines there will always be some form of variances. The organization should expect a few variances and be able to work these discrepancies in any budget constraints.…
In todays ever changing business environment the traditional budgeting model is no longer able to effectively provide an organizations with the tools necessary to be successful. Instead, organizations are now adopting the beyond budgeting model which enables organizations to quickly respond to changing events, attract talented staff, continuously pursue excellence, and provide solutions that meet the unique needs of their customers.1 One such organization that has gained success through the adoption of the beyond budgeting model in the areas of continuous planning, resource allocation, and employee performance evaluations is Statoil.2…
As organization grow larger and develop, so do their structure and complexity; increasing the complexity of budgeting with it. Various departments are created to meet created requirements in operations. Integration of the separate divisions results in a sharing of resources, which then complicates overall budgeting within the organization. The resulting accepted practice to account for these costs and account for them accurately is to implement an accurate cost allocation of shared expenses. “The cost allocation is an essential part of the multipurpose planning process where cost-sharing will be required. It provides information needed to determine the magnitude and share of estimated project costs that are reimbursable. This information is essential to the tests of financial feasibility and plan acceptability. During subsequent planning and construction, it provides the information required for allocating actual expenditures and insures that cost accounts are maintained consistent with the plan formulation and allocation principles” (USACoE, 2009). With and accurate and detailed cost allocation process, funding can be tracked and analyzed throughout complex integrated processes involving numerous departments within an organization.…
Effective financial management is the basis of thriving health care organizations. Organizations must make good investment decisions based on objective analysis (Healthcare Financial Management Association [HFMA], 2005). Integration of financial management principles provides decision makers with guidance to make capital decisions maximize mission-based benefits at effective costs (HFMA, 2005). An operating budget is the statement of profit and loss for the entire organization. Various health care entities prepare operating budget for the following year for discussion and approval by top management (Academic Writing Tips, 2011). At the end of the year, departmental managers provide an account for the previous year’s financial performance (Academic Writing Tips, 2011).…
There are a variety of factors affecting the budget of Pleasanton Unified School District. One is the continued increase in enrollment. Pleasanton has seen a slight increase over the years of growth with the anticipated enrollment being 14,740 which is an increase of just over 1%.. The cost of living increase (COLA) will be calculated at 4.53% with no deficit. Lottery income will be $137.00 per annual ADA. OF this amount, $118.00 is unrestricted and Prop 20 restricts $19.00 for instructional materials.…
Determine specific strategies to manage budgets within forecasts. Zero based (analyzes every expense within an organization and justifies the need and cost of each), activity based (is the gathering of the operating cost data, which is assigned to specifc activies such as engineering) performance based (performance dashboard uses the metrics of performance and analyzes the root cause of financial problems), cost variances (looks at the differences of the actual cost and expected cost of an expense) and benchmarking (gathers information of the performance and processes from similar organizations and compares the data to help with making improvements). Motivating the staff and informing them of the budget goals is another strategy that may be used to help the organization succeed.…
-In the wake of the dot-com industry’s collapse, the steep stock market drop, the rise of the dollar against foreign currencies, increased unemployment, and other economic factors, March 2001 officially began a nationwide recession that triggered budget problems in at least forty-five states.…
For this exercise, estimates, budget, conditions, conditions forecast were the things to be kept in mind. From the conditions that were specified:…
Performance evaluations are used by organizations to measure and evaluate productivity. The roles and responsibilities of various types of nurse managers have developed to include increasing fiscal responsibility over the past several years. The purpose of this study was to analyze the extent various nurse manager groups perceive performance evaluation as inclusive of financial management expectations in light of their participation in actual budget behaviors. A systematic random sample of 575 nurse managers was selected from a single southern state. One hundred twenty nurse managers returned survey packets.…
To have a basis in illustrating the analysis of variance or difference between budgeted and actual figures, the budget of a sampled (unknown) company was utilized (http://www.smallbusinessnotes.com/business-finances/budgeting-systems.html).…
CHAPTER 8 QUESTIONS FOR WRITING AND DISCUSSION 1. Budgets are the quantitative expressions of plans. Budgets are used to translate the goals and strategies of an organization into operational terms. 2. Control is the process of setting standards, receiving feedback on actual performance, and taking corrective action whenever actual performance deviates from planned performance. Budgets are standards, and they are compared with actual costs and revenues to provide feedback. 3. The planning and control functions of budgeting can benefit all organizations regardless of size. All organizations need to determine what their goals are and how best to attain those goals. This is the planning function of budgeting. In addition, organizations can compare what actually happens with what was planned to see if the plans are unfolding as anticipated. This is the control function of budgeting. 4. Budgeting forces managers to plan, provides resource information for decision making, sets benchmarks for control and evaluation, and improves the functions of communication and coordination. 5. A master budget is the collection of all individual area and activity budgets. Operating budgets are concerned with the incomegenerating activities of a firm. Financial budgets are concerned with the inflows and outflows of cash and with planned capital expenditures. 6. The sales forecast is a critical input for building the sales budget. However, it is not necessarily equivalent to the sales budget. Upon receiving the sales forecast, management may decide that the firm can do better than the forecast indicates. Consequently, actions may be taken to increase the sales potential for the coming year (e.g., increasing advertising). This adjusted forecast then becomes the sales budget. 7. Yes. All budgets are founded on the sales budget. Before a production budget can be…
At first we would like to pay our gratefulness to our honorable teacher Tanvir Mohammed Haider Arif to give such an interesting and educative assignment. Our assignment topic is Budget FY2012-2013 “A critical Analysis”. Our team which is comprises 12 members give its whole hearted co-operation and effort to do the assignment successfully. At the very beginning we have set our Objectives and sketch our roadmap to perform the assignment. In this assignment we have tried to discuss the impact of Proposed Budget FY2012-2013 on every sector along with its critical evaluation. Initially we have spent some times to understand the general concept of overall budget and its impact on our life whether it is positive or negative by discussing ourselves. By collecting information and consulting relevant contacts we have mount our resources and then given our best effort to prepare the assignment. More over this assignment requires not only the best utilization of our knowledge and our commitment as well but also…
Provides a basis for performance appraisal (variance analysis). A budget is basically a yardstick against which actual performance is was unread assessed. Control is provided by comparisons of actual results against budget plan. Departures from budget can then be investigated and the reasons for the differences can be divided into controllable and non-controllable factors.…
To conduct the analysis correctly and make decision appropriately, managers need to know how to make a budget. Simply, the managers have to identify the expenses will be used and estimate the amount of money will be spent on those expense. Next, the actual costs will be keeping tracked and compared with the budget. Lately, the decision will be made based on the variances. One thing to remember that…
The traditional way of budgetary control has a highly centralized command-control approach to budgets, this approach has in time shown it was not cost effective, time consuming, has very little use in forecasting in actual organization performance evaluation although it is highly long term performance oriented, and some times it can lead to dysfunctional behaviours of mangers and budget games.…