Budgetary Process: Sequence and Relevance in Behavioral Aspect

Budget

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Sequence of budgetary process:...................................................................................................3
Issue of relevance in behavioural aspect of budgetary control....................................................5
CONCLUSION................................................................................................................................6
REFERENCES ...............................................................................................................................7

INTRODUCTION
The framework of budget is an endless process comparable to broader process of
financial management (Budgetary process, 2020). This includes identifying objectives and
collecting data; establishing standards and reconciling priorities, developing the schedule;
tracking actual results and assessing variances; modifying spending plan, assumptions, or
objectives; and redefining objectives. Accounting and managing personnel are primarily
responsible for framing budget. Budgeting is needed to keep tracking over costs and receipts.
This appears as a mechanism for tracking and managing an enterprise's funds. It starts by
determining on financial targets under which budget will be drawn up.
This study consists of explanation about sequence of whole budgetary process and
discuss issues regarding relevance within behavioural aspects of it.
TASK
Sequence of budgetary process:
Management accounting is wider aspect which also involve budgetary controlling which
ensures effective reporting of fiscal and monetary information. For establishing adequate
budgetary controls, managers adopt budgetary process. Here in this context following are
sequence of a systematic budgetary process, as follows:
Determining the Flow of Information:
A corporation collects the data required to develop a budget through two ways:
 It consolidates the processes and has upper management setting goals and expectations
for the organization
 It guides individual work divisions and teams to collect the information on their own.
Here former one considered as top-down budgeting approach, while latter is called
bottom-up budgeting approach (Cheng, Chen and Shih, 2014).
Budgets built through bottom-up approach are usually preferable, even if just for the fact
that individual employees and divisions know better about respective departments than
centralised and upper management. Whereas bottom-up budgeting approach needs more time for
execution as well as complicated in managing.
Determining goals and what to measure: