Assignment Part 2: Theory Question on Short Term and Long Term Budgeting.
Yes, I agree that budgeting is the key component in management short and long term planning. According to the website Thinking Make Easy, “Budgeting is a process of planning, setting goals and defining the objectives of the management that are needed for a given period of time. It is the tool that provides specific direction and achievements for the company” (Para 1). As budgeting may benefit a lot in term of saving more money either for a company or yourself. This also means that budget planning is the financial plans for the control of corporate in many terms such as human resources which is the number of employee needed to efficiently finish the work, the future operation of the group as it involves budget allocation. Companies usually uses long term planning in budgeting and individuals normally uses short term planning. In a company standard budgeting plans are use to test the sales and productivity as well as the company’s earnings and cash inflow of the corporate. Also the way of how the corporate maintain it while running the business.
Budget planning assist us in various way to plan well for our future money usage such as investment on our asset, daily expenses and even going on for a holiday while you can save some money. In addition, more importantly is that we have to get a good control on the cash inflow to maintain it and not the other way round. According to the website “entrepreneur”,” However, here is a word to the wise: Financial budgeting is vital, but it's important to avoid getting so caught up in the budget process that you forget to keep doing business.”(Para 4).
The ability to budget is a very important step to the settings of standards of performing, motivating employees and also to complete the missions of a corporate. Besides,.long term planning helps for investors of business usually plans and budget their retirements by buying permanent assets like...
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