Samenvatting

Haal een 16/20 met deze samenvatting van 'Introduction to budgeting'!

3 keer verkocht

Instelling
Arteveldehogeschool (Artevelde)

Deze samenvatting is door mij gemaakt, het bevat enkel hoofdstuk 7 en 8. Deze twee hoofdstukken heb ik namelijk gezien in de les en ik ben geslaagd aan de hand van deze examen. (16/20) De informatie komt uit het boek 'introduction to budgeting-Artevelde University College' This summary is mad...

[Meer zien]

Voorbeeld 3 van de 26 pagina's

Bekijk voorbeeld

Heel boek samengevat? Nee
Wat is er van het boek samengevat? Hoofdstuk 7 en 8
Geupload op 27 april 2021
Aantal pagina's 26
Geschreven in 2019/2020
Type Samenvatting

Volgen

norabarinora Lid sinds 3 jaar 20 documenten verkocht

€4,99

In winkelwagen

Op verlanglijstje

100% tevredenheidsgarantie
Direct beschikbaar na je betaling
Lees online óf als PDF
Geen vaste maandelijkse kosten

Samenvatting Budgeting

7. Introduction to budgets and preparing the
master budget
Introduction
All organizations need budgets to make the best and most profitable use of their resources.
Budgeting can cover such diverse issues. In this chapter we look at the benefits & costs of
budgets and illustrate the construction of a detailed budget.

1. Budgets and the organization
Definition
=A budget expresses, in quantitative terms, an organization’s objectives and possible steps
for achieving them.
Budgeting is much more than limiting spending. It moves planning to the forefront of the
manager’s mind.
!
It’s better with numbers* è it’s easy to follow up
In other words, it is a reflection of the objective of the company!

Advantages of Budgeting

• Formalization of planning;
Þ Budgeting forces managers to devote time to planning, on a day-to-day basis.
The budgeting process formalizes the need to anticipate and prepare for
changing conditions. To prepare a budget, a manager should set objectives
and establish policies to aid their achievement. (objectives=destination points,
budgets= road maps guiding)

• Evaluation of activities (=what’s is going good & what’s going bad);
Þ Budgeting typically uses the current activities of the organization as a starting
point for planning, but how managers use this starting point varies widely:
Þ Some organizations:
Current activity level=It takes the numbers from last year and they add
a marge, not the best way to do it. The budget process automatically assumes
that for the new budget period= the activities for the previous period.

Je start met een schatting Þ Others use the zero-base budge= A budget that requires justification of
expenditures for every activity, including continuing activities. The
advantage of this budget is that managers reevaluate all activities.
In practice, budgeting for most organizations falls somewhere between these 2.

Nora B 1

, Samenvatting Budgeting

• Communication and coordination;
Þ Budgeting forces managers to communicate and coordinate their department’s
activities with those of other departments and the company as a whole.

• Performance evaluation;
Þ Budgeted performance goals generally provide a better basis for evaluating
actual results than would a simple comparison with past performance.

Potential problems in implementing budgets (3) + explantation!
1. Low levels of participation in the budget process and lack of acceptance of
responsibility for the final budget
2. Incentives to lie and cheat in the budget process
3. Dificulties in obtaining accurate sales forecasts

1. Budget participation and acceptance of the budget;
Þ The advantages of budgeting are fully realized only when employees
throughout the organization accept and take responsibility for the final budget.
The main factors affecting budget acceptance are as follows:
o The perceived attitude of top managementè the attitude will
influence lower-level managers’ and employees.
o The level of participation in the budget processè participative
budgeting= budgets formulated with the activeparticipation of
all affected employees.
o The degree of alignment between the budget and other
performance goalsè Management should seek to create an
environment where there is a true two-way flow of information
in the budget process so that lower level managers and
employees perceive that their input has a real effect on budget
outcomes. Budgets can help each manager & employee achieve
better results.

2. Incentives to lie and cheat
Þ Effective budgets provide targets for managers and motivate them to achieve
the organization’s objectives.
Þ Budgetary slack/ budget padding= overstatement of budgeted cost or
understatement of budgeted revenue to create a budget goal that is easier to
achieve.
Þ There are incentives to “cheat”, to make results appear better than they
actually are. The incentive to cheat is particularly strong when the division is
in danger of falling just short of 80% of the profit target. An extreme form of
cheating is to “cook the books”, that is report false profit numbers.

Case: When profits fall so far short of the 80% profit target that there is no
hope of achieving a bonus then in this case , managers may move current
sales into the next year by encouraging customers to defer purchases until the
next year, thus effectively transferring current income to the future.

Why would managers take actions to decrease current reported profit?

Nora B 2

, Samenvatting Budgeting

Raison 1: Moving this year’s sales into next year or moving next year’s
expenses into this year increases next year’s income, ensuring a higher level of
reported profit (and probably a higher bonus) next year.

Raison 2: By decreasing this year’s income, the manager may avoid increasing
performance expectations for the next year- and thus may avoid a higher
budgeted profit target for next year.

è the main way to avoid lying in preparing the budget is to reward good
budget forecasts as well as good performance against the budget. It is also
important to motivate managers to take personal responsibility for their
budgets.

3. Difficulties of obtaining accurate sales forecast
Þ = Moeilijkheden bij het verkrijgen van nauwkeurige verkoopprognoses
Þ The sales budget is the foundation of budgeting. Why? Because the
accuracy of all components of the budget depends on the accuracy of
budgeted sales.
Þ Upper management inititally sets the sales target, then employee
teams in each department provide their inputs. Once everyone agrees
on a sales forecast, managers prepare monthly departmental budgets
based on the sales forecast.
Þ Managers prepare monthly departmental budgets based on the sales
forecast= a prediction of sales under a given set of conditions.
Þ The sales budget = the result of decisions to create conditions that will
generate a desired level of sales.

Important factors considered by sales forecasters include following:

Nora B 3

Dit zijn jouw voordelen als je samenvattingen koopt bij Stuvia:

Bewezen kwaliteit door reviews

Studenten hebben al meer dan 850.000 samenvattingen beoordeeld. Zo weet jij zeker dat je de beste keuze maakt!

In een paar klikken geregeld

Geen gedoe — betaal gewoon eenmalig met iDeal, Bancontact of creditcard en je bent klaar. Geen abonnement nodig.

Focus op de essentie

Studenten maken samenvattingen voor studenten. Dat betekent: actuele inhoud waar jij écht wat aan hebt. Geen overbodige details!

Veelgestelde vragen

Wat krijg ik als ik dit document koop?

Je krijgt een PDF, die direct beschikbaar is na je aankoop. Het gekochte document is altijd, overal en oneindig toegankelijk via je profiel.

Tevredenheidsgarantie: hoe werkt dat?

Onze tevredenheidsgarantie zorgt ervoor dat je altijd een studiedocument vindt dat goed bij je past. Je vult een formulier in en onze klantenservice regelt de rest.

Van wie koop ik deze samenvatting?

Stuvia is een marktplaats, je koop dit document dus niet van ons, maar van verkoper norabarinora. Stuvia faciliteert de betaling aan de verkoper.

Zit ik meteen vast aan een abonnement?

Nee, je koopt alleen deze samenvatting voor €4,99. Je zit daarna nergens aan vast.

Is Stuvia te vertrouwen?

4,6 sterren op Google & Trustpilot (+1000 reviews)

Afgelopen 30 dagen zijn er 68175 samenvattingen verkocht

Opgericht in 2010, al 15 jaar dé plek om samenvattingen te kopen

Start met verkopen

Samenvatting

Haal een 16/20 met deze samenvatting van 'Introduction to budgeting'!

Document informatie

Onderwerpen

Gekoppeld boek

Geschreven voor

Verkoper

Ontvangen beoordelingen

Voorbeeld van de inhoud