Budgeting

Budgeting

 

 

  • Analyze the major pros and cons of preparing annual company budgets. Identify at least two (2) critical budget line items that you believe are essential for managing your company. Provide a rationale for your response.
  • One way to monitor a company is to break it into different centers or business units. For example, a Revenue Center oversees the sales teams while the Cost Center focuses on making the product or delivering the services. If the company maintains a store or locations that handles both revenue and costs, this is called a Profit Center. Managers of each center have their own budgets and are held accountable for achieving it. Analyze the most common responsibility reporting systems. From your analysis, argue at least one (1) pro and one (1) con of using responsibility reporting systems.

 

Answer Preview…………….

Budgeting is important as it helps in focusing on the objectives of the company and focus towards the achievement of the profitability of the company. The roadmap of success of the business is enhancement where there is identification of the opportunities and the diversification of the company budgeting. With budgeting, there is establishment of the expenditures and revenues of the company following a specific level and this guides the achievement of the set goals by the company. It increases the need to track the financial performance of the organization and the strategic performance of the operations. The understanding of the operational costs and the expansion needs of the company is important as it opens up the organization to the development of operational strategies. Pros and Cons of Annual Budgets. With annual budgeting there is management of the operations of the business and this entails the definition of the different tracks to follow.  The company sets the annual budget depending on the activities of the organization and this is important as it is easy to adjust depending on the company operations. The company focuses on the direction that the company undertakes and this means the analysis of the different milestones in company sales. Budgets………..

APA 909 words