Asumme the company has always used a ‘traditional’ incremental approach towards building its budgets to plan for the future. The company is now concerned that this may not be appropriate in the current turbulent political and economic environment which he believes may last for a number of years. As a result, he has also asked you for advice about how he might adopt a more flexible planning approach without losing financial control. Critically review the current budget preparation process. Critically analyse the potential advantages and disadvantages of adopting a ‘beyond budgeting’ approach instead. Provide Cameron with a recommendation(s) for the future based on your findings.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Asumme the company has always used a ‘traditional’ incremental approach towards building its budgets to plan for the future. The company is now concerned that this may not be appropriate in the current turbulent political and economic environment which he believes may last for a number of years. As a result, he has also asked you for advice about how he might adopt a more flexible planning approach without losing financial control.
- Critically review the current budget preparation process.
- Critically analyse the potential advantages and disadvantages of adopting a ‘beyond budgeting’ approach instead.
- Provide Cameron with a recommendation(s) for the future based on your findings.
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