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    Essentials of Effective Budgeting

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    Cyrus Santos
    Essentials of Effective Budgeting discusses key attitudes and conditions necessary for a successful budgetary control system. 1) Top management must fully support the system and provide impetus and direction. 2) Responsible executives need to participate in setting budget figures to ensure proper implementation. 3) Budget figures must be realistic and reasonably achievable goals. 4) Clearly defined responsibility centers within the organization are important to derive highest benefits from the system. Continuous budget education for responsible supervisors is also crucial.

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    Essentials of Effective Budgeting

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    Cyrus Santos
    930 views2 pages
    Essentials of Effective Budgeting discusses key attitudes and conditions necessary for a successful budgetary control system. 1) Top management must fully support the system and provide impetus and direction. 2) Responsible executives need to participate in setting budget figures to ensure proper implementation. 3) Budget figures must be realistic and reasonably achievable goals. 4) Clearly defined responsibility centers within the organization are important to derive highest benefits from the system. Continuous budget education for responsible supervisors is also crucial.

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    Essentials of Effective Budgeting discusses key attitudes and conditions necessary for a successful budgetary control system. 1) Top management must fully support the system and provide impetus and direction. 2) Responsible executives need to participate in setting budget figures to ensure proper implementation. 3) Budget figures must be realistic and reasonably achievable goals. 4) Clearly defined responsibility centers within the organization are important to derive highest benefits from the system. Continuous budget education for responsible supervisors is also crucial.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    930 views2 pages

    Essentials of Effective Budgeting

    Uploaded by

    Cyrus Santos
    Essentials of Effective Budgeting discusses key attitudes and conditions necessary for a successful budgetary control system. 1) Top management must fully support the system and provide impetus and direction. 2) Responsible executives need to participate in setting budget figures to ensure proper implementation. 3) Budget figures must be realistic and reasonably achievable goals. 4) Clearly defined responsibility centers within the organization are important to derive highest benefits from the system. Continuous budget education for responsible supervisors is also crucial.

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    DISCUSSION

    Essentials of Effective Budgeting


    A budgetary control system may prove successful only if certain attitudes and conditions are present
    absence of which will negate to a sizable extent the value of a budget system in different business
    such attitudes and conditions which are crucial for effective budgeting are as follows:

    1. Support of top management. When the budget system is to be effective, it must be totally
    supported by each member of the management and the impetus and direction should come from the
    top management. No Control system may be effective unless the company is convinced how the top
    management considers the system to be essential.PAMELA

    2. Participation by responsible executives. Those entrusted with the efficiency of the budgets need to
    participate in the procedure of setting the budget figures. This will make sure proper implementation
    of budget programmes.CHRISTINE MAE

    3. Reasonable goals. The budget figures needs to be realistic and represent reasonably achievable
    goals. The responsible executives must agree that the budget targets are attainable and reasonable.

    JAN

    4. Clearly defined organization. In order to derive highest benefits from the budget system, nicely
    defined responsibility centers ought to be built up within the company. The controllable costs for
    every responsibility centers should be individually shown.ANABEL

    5. Continuous budget education. The easiest way to make sure the active interest of the responsible
    supervisors is constant budget education in respect of goals, techniques and potentials of budgeting.
    This might be accomplished through written manuals, meetings and so on. actual results achieved
    etc. whereby preparation of budgets. may be discussed.ERIKA

    6. Adequate accounting system. There is close relationship between budgeting and accounting. For
    the preparation of budgets, one has to depend on the accounting department for reliable historical
    data which primarily forms the basis .for many estimates. The accounting system should be so
    designed so as to set up accounts in terms of areas of managerial responsibility. In other words,
    responsibility accounting is essential for successful budgetary control.EYAN

    7. Constant vigilance. Reports comparing budget and actual results should be promptly prepared
    and special attention focused on significant exceptions i.e. figures that are significantly different from
    those expected.MARIANNE

    8. Maximum profits. The ultimate object of realising the maximum profit should always be kept
    uppermost.WILMAR
    9. Cost of the system. The budget system must not cost more than it is worth. Since it is actually not
    practicable to calculate just what a budget system is worth, it simply implies a caution against
    including expensive refinements unless their worth clearly justifies them.CHRISTINE RAZON

    10. Integration with standard costing system. Where standard costing system can be used, it should
    be totally integrated with the budget programme, in regard of both variance analysis and budget
    preparation.CYRUS
    http://www.edu-resource.com/accounting/limitations-of-budgetary-control.php

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