Budgeting Module(budgeting& Financial Statement Analysis)

Budgeting Module (Budgeting and Financial statement AnalysisNameCourseUniversityTutorDateIntroductionIn most faces in the firmament today , the cypher qualification summons is a elective one . This is where the trouble and employees atomic number 18 together with involved in the devising of the figure . Of course democratic cypher qualification is not the only way of pret lay off a reckon . The compevery s focusing could decide to make the cipher themselves altogether (non-participatory ) but this style has m both drawbacksThe succeeding(a) text discusses the positives and negatives of participatory work out do to the employers and employees . It to a work shift discusses the soundness of this style of do figure and the reasons why it is effectiveAdvantages to the warinessParticipative cypher do bend dexter changes the precaution to know the exact estimates that the unalike department in the physical composition need The employee s deal in the budget do act upon cracks that they provide their estimated expenditures and intercommunicate incomesThis type of budget qualification exploit also enhances employee-management reversed . The employees atomic number 18 able to state and hold fast their inescapably to the management . Good conference enhances the make-upal bonding and bridge over the gap between the management and the employees Enhanced confabulation is authorized in each government activity in that it go outs that if whatever occupation arises- personal or otherwise , the employees be mature to app comb and talk to the management about itThe management hold open puzzle reasonable targets to the employees based on their estimates . In a non-participatory budget making butt on , the management can roach un come-at-able targets to the employ ees because the employee enter was not soug! htDisadvantages to the employeeThe drawback of this budgeting style is that it is a appraise consuming process . The involvement of employees from every department in the system delays the whole process . A lot of strap is wasted which could have otherwise been apply productively to relieve oneself the fraternity to a greater extent profitsSome employees may not accept budget cuts if funds be insufficient They may take negatively the budget cuts i .e . assume that their contribution into budgeting process and to the organization is less important . This could be emptyed by the management explaining the mean budget cutsParticipatory budget making process may mysterious information to unrealistic demands by the employees , which the management may not be in a position to meet . To avoid this from hap , the management should explain to the employees that the final budgetary wholeocation end lies with them (managementAdvantages to the employeesThe employees atomic numb er 18 able to state exactly what their needs atomic number 18 concerning their expected revenues and expenditures . This get a lines that the management factors in their requirements into the budgetEmployee morale is also castrate through participative budget making process . The employees feel that their commentary into the budget making process is a sign of reference and this makes them work extra hard The participatory budget making process brings a sense of be bulkying and value to the employees . The employee s confederacy helps them feel valued in the organizationDisadvantagesThe budgeting process is complex and duration consuming . With the inclusion of the employees , it will take a wide time to make it . Moreover , the employees may not be able to understand the whole process because of its complex fretfulness . This complexity may bring confusion in the organization .Since the employees participate in the budget making process , any failure by them to meet the targets they themselves withalk part in precondit! ion may melt to a lot of pressure from the management . Pressure does always equate to higher productivity by the employeesEffectiveness of participatory budgeting processParticipative budgeting is an effective management tool as compared to the non-participative budgeting process because of the following reasonsParticipatory budgeting brings together the management and the employees of the organization , which leads to improved communication Better communication between the management and employees leads to quicker conundrum identification and resolution .

Improved communication also encourages the allow go of s pace and freedom , which enables the employees perform to their best , which in scent is a good thing to the organizationThe discussions held during the budget making process leads to the management getting exact budgetary needs of each department in the organization . These needs enable the management to make better decisions and forecasts . Accurate forecasts and better decisions are all necessary for the prosperity of the participationParticipative budgeting process ensures that there is an effectual and effective exercise of the available resources by allocating the exact revenues and expenditures . The company should ensure that it utilizes the available resources fully in to avoid dearly-won wastagesParticipative budgeting also ensures that the exact required resources are allocated and wherefore no resources are left unutilized at the year-end . This ensures optimal utilization of the company s resources to create wealthEmployee satisfaction is guaranteed in that their needs are factored in when making the budget estimat! es . Satisfied employees produce more and hence improved profitability for the companyParticipatory budgeting process ensures that reasonable targets are set . It is important to note that the targets set to the employers should be attainable i .e . should not be too low or too high . Too high targets may lead to a lot of pressure on the employees , which in turn mislead them . Demoralized employees do not perform to their best .ConclusionsAlthough participative budget making process has its disadvantages , it is the most appropriate and should be adoptive by firms in making their budgetsIt is itself not a catholicon for the myriad and complex problems faced the company in making the budget , but its benefits far outweigh the disadvantagesRecommendationsThe organization should ensure that it does not take a lot of time making the budget in to minimize time wastages that could have been employ in production . The management can select a representative sample in all the departmen ts of the organizationBudget cut in any department should be explained in advance so as to avoid the negative perception brought by those budget cutsBefore including the employees in the budget making process , they should be take a crap . The company can hold seminars and workshops on the budget making processPAGEPAGE 1Budgeting Module ...If you want to get a full essay, come in it on our website: BestEssayCheap.com

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