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Business Model Development Using Traditional Budgets

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Added on  2020-12-31

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Purpose of budget preparation and the process of budget preparation and budget process which helps the organisation in development of business model 5 ii Application of traditional budgets for planning the future cost management for the Snappy Drinks plc. Potential application of the above mentioned methods and presetting specify example to the Snappy Drinks Plc of the alternative budgeting methods 10 vi Presetting the best methods amongst all the above for Snappy Drinks Plc 11 CONCULSION 12 INTRODUTION Business finance is the proves which is responsible for

Business Model Development Using Traditional Budgets

   Added on 2020-12-31

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ContentsINTRODUCUTION........................................................................................................................5PART 1............................................................................................................................................5i. Purpose of budget preparation and the process of budget preparation and budget processhelping the organisation in development of business model.......................................................5ii Application of traditional budgets for planning the future cost management for the SnappyDrinks plc.....................................................................................................................................7iii. Analyzing the appropriateness of traditional budgetary system............................................8PART 2............................................................................................................................................8iv. Presenting the understanding of alternative budget preparation methods along with theirbenefits and drawbacks................................................................................................................8v. Potential application of the above mentioned methods and presetting specify example to theSnappy Drinks Plc of the alternative budgeting methods..........................................................10vi Presetting the best methods amongst all the above for Snappy Drinks Plc...........................11CONCULSION..............................................................................................................................124
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INTRODUCUTION Business finance is the proves which is responsible for allocation of the businessresources, creation of the forecast, review of opportunities for the equity and financing throughdebt along with other concept and function of business. Among all this the main requirement isrelated with the ascertainment of the business funds and resources to carry out the businessactivities. For all of these the essential art is preparation of budgets for an organisation, whichincludes forecasting the future spending and earing based on past trends or as per therequirement of the activities the business. In the present report the requirement of budgets and tisprocess is presented to Snappy Drinks Plc. With this the application of traditional budget in theorganisation along with the use and sufficiency of the incremental budget is presented to themanagement of Snappy Drinks Plc. In the next part of the report various methods of budgetspreparation are defines along with their application in Snappy Drinks Plc and benefits anddrawbacks. After this the best budgeting method will be suggested to the business organisationSnappy Drinks Plc.PART 1i. Purpose of budget preparation and the process of budget preparation and budget processhelping the organisation in development of business modelBudgetPurpose of preparing budget:Budget can be defines as the process of preparing financial plans for implementing themanagement decision. The budgets in the organisation Snappy Drinks Plc are prepared for theapplication and implementation of long term plan for the current year ached through thedevelopment of the detailed financial plan (Chenhall and Moers, 2015). The budgets can beexplained as that process in which the expenses and revenues of the Snappy Drinks Plc areestimate beforehand. The budgets are prepared for each activity of the organisation in which costand expenses related to it are estimated and in this limit the organisation is required to carry out5
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the respective activities with allocated funds and resources. The budgets in Snappy Drinks Plcensure effective conduction of the business activities within the stipulated funds.Process of budget preparation: The budget preparation requires set of skills, experiences and professional ability todevelop effective budgets for Snappy Drinks Plc. This process includes certain essential stageswhich starts from the communicating the details to the budgeted policy and related guidelines tothose persons who are responsible for carrying out the process of and preparation of budget.After this step comes the determination of the factors that restrict the performance such as thesales volume in the budget. With this the sales budgets are prepared with the assumption that thesale demand is the one factors putting restriction of the output (Management Accounting, 2018).With the initiation process begins where different budgets pertaining to the business actives arestarted. Over the prepared budgets negotiations are done with the executives and supervisors.With this the budgets are reviewed and coordinated. The final acceptance of budget is to meetafter all scrutiny and mitigating the changes of possibility of any mistake in the budget. Withimplementation of the budgets the ongoing reviews are also taken to take follow of the actualperformance with budgeted one to develop the strategies to cope with the variances.Assistance to the business organisation: The budgets are prepared to assist the management of Snappy Drinks Plc in decisionmaking process for various business activities. The businesses’ annual budgets are set in thecontext of long term plan which exist irrespective of the facts that they are made explicit. Thebudgeting process fits into the overall strategic planning and controlling framework of SnappyDrinks Plc. This can be explained as the long term plans are the statement of the preliminarytargets and activities of Snappy Drinks Plc which the organisation is required to achieve throughits strategic plans and the ultimate goal and objective of Snappy Drinks Plc. The budgets inSnappy Drinks Plc are used for different purpose which includes planning of the annualoperations of the organisation which requires effective coordination’s with accounts departmentand resection activity departments as well. Also, it includes coordinating the activities of variousparts of the business to ensure that all the parts are in harmony with each other. The budgetingprocess also requires effective communication regarding the plans to the managers, heads and6
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