Lecture 2- Budgeting (1)

Lecture 2- Budgeting (1)

1. Purposes

   • Planning annual operations
   • Controlling activities
   • Evaluating performance of managers
   • Coordinating activities of various parts of organisation & ensuring there's harmony
   • Communicating plans to various responsibility centre managers
   • Motivating managers to strive to achieve organisational goals

2. Stages in budget process

   • Communicate policy & guidelines to those reponsible
   • Determine factor that restricts output
   • Prepare sales budget
   • Prepare supporting budgets & master budgets
   • Negotiate budgets with line managers
   • Coordination & review of budgets
   • FInal acceptance of budgets
   • Ongoing review of budgets