Seminar on Organsation Budgeting

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Seminar on Organsation Budgeting

  1. 1. SIDVIN S SHETTY
  2. 2. The responsibility for budget for budget direction and execution is usually placed in the hands of the Budget Committee which reports to the top managementIn large companies the in-charge of Budgetary Committee function includes the sales manager, personnel manager, the production manager, the finance manager, the chief engineer, the treasurer and the chief accounts officer.
  3. 3. The principal functions of the budget committee are to:Decide the companies general policies and objectives.Receive and review individual budget estimates concerning different departments or units.Suggest changes, modifications in accordance with organizational objectivesApprove budgets which act as an authority for department actionReceive and analyze performance reports regarding the implications of the budgetsSuggest corrective actions to improve efficiency and achieve budgetary goals. budgetary goals.
  4. 4. A budget manual is a document which defines the responsibilities of persons engaged in a budgetary programme and sets out the routine, the forms and records required under budgeting.Budget manual specify the procedures to be followed in developing the budget and reports of the budget information and actual operating data to be used
  5. 5. The budget period is an important factor in developing an comprehensive budgeting programme.This is the periods for which forecasts can reasonably made and budgets can be formulated.The length of the budget period depends on the type of the business, the length of the manufacturing cycle from raw material to finished product, the case or difficulty of forecasting future market conditions and other factors.
  6. 6. 1.Short-range budget2.Long-range budget1.Short-range budget:Short-range budgets may cover periods of three, six or twelve months depending upon the nature of the business.Most firms use one year as the planning period. Wholesale and retail firms usually employ a six- month budget which is related to their selling seasons
  7. 7. The following factors should be considered:The budget period should be long enough to cover complete production of various productsFor business of a seasonal nature, the budget period should cover at-least one-entire seasonal cycle.It should provide adequate time to arrange the funds for production and other purposesThe budget period should coincide with the financial accounting period to compare actual results with budget estimates
  8. 8. 2. Long-range budget:Long-range budgets or plans are neither described in terms of précised terms, nor are they expected to be completely coordinated future budgets.They cover specific areas, such as future sales, future production, long-term capital expenditures, extensive R&D programs, profit forecasts etcThey evaluate future implications associated with present decisions and help management in making present decisions and select the most profitable alternative.
  9. 9. Long-range budgeting doesn’t eliminate risk altogether: : it only reduces the risk to a level which doesn’t hamper the production and achievement of company objectives.There are many factors while considering an long- range budget such as market trends, economic factors, growth of population, consumption pattern, industrial production, national income, governments economic and industrial policy etc.
  10. 10. THANK - YOU

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