Need of Budget and Process Samples for Students †MyAssignmenthelp.com

Question: Discuss about the Need of Budget and Process. Answer: A budget is a statement containing the estimated revenue (incomes) and expenses (costs) over a particular period of time (DRURY, 2013). It helps in ensuring the availability of funds whenever funds are required. Budgets are the most important part of future financial planning. It basically helps in keeping a proper track of all the spending of the budget making person or organization thereby managing their cash flows. Need of budget: To meet the financial goals: Without a concrete budget plan a person or a business organization might spend their funds in activities that are not so necessary consequently ending up with shortage of funds for the necessary areas. Thus, it helps in appropriate distribution of funds to achieve the key financial goals. To take sound economic decisions: Budgets provides the true picture of the financial position of an entity, thereby enabling them to prioritize the needs according to the funds possessed by them. To evaluate the overall spending or performance Budgets helps in evaluating the performance by comparing actual results with the planned results. If excessive funds are used in comparison to the budget plans than it will help in preventing wastage of funds in future. The roles and responsibilities of a budget manager in an organization The basic responsibility of budget manager is to ensure that the resources of the organization are appropriately distributed between the various departments and they are adequately utilized and safeguarded in accordance with the budgeted plans. The other responsibilities are: To prepare the statement of budgets periodically and revise them according to the changing needs of organizational environment of the company. Evaluate the actual results by comparing them with the budgeted plans so as to understand the root causes of over spending of resources of the company, if any (Ahid Augustine, 2012). Following aspects must be changed in the budgeting process: The budgets must not be very rigid to follow and therefore, a budget must be prepared in such a way that if any changes are required as per the organizational processes and policies, they can be incorporated. The implementation of budget is the most important aspect of the budgeting process where the budgeted plan must be communicated adequately among all the organizational personnel so that they can carry out the business operations in accordance with the budgeted plans. Moreover, a budget must be monitored and revised within reasonable time intervals so that any change whether internal or external can be taken into consideration while carrying out the business activities. References: Ahid, M. Augustine, A., 2012, The Roles and Responsibilities of Management Accountants in the Era of Globalization, Global Journal of Management and Business Research, 12(15), pp. 43-53. DRURY, C.M., 2013.Management and cost accounting. Springer.