Business Finance

Running head: BUSINESS FINANCE
Business Finance
Name of the Student:
Name of the University:
Author Note

1BUSINESS FINANCE
Executive Summary
The issue presented in the case study is that UniDate a dating agency has been
considering the expansion of business both in terms of location and in terms of the customer
base to which it provides service. The finance director, Anna reckons that the preparation of
the financial budget on the basis of traditional approach to budgeting may not be
advantageous as the business is undergoing huge change or the business is being restructured.
Therefore, she tries to convince Alasdair, the managing director of the company about the
usefulness of the budgets that are prepared on the basis of the alternative methods of
budgeting.
This study aims to provide an overview into the general purpose of budgets and the
particular method of budgeting that is apt for the situation presented in the case study.

2BUSINESS FINANCE
Table of Contents
Benefits of having a budget and the ways in which it helps business........................................3
Traditional budgeting approaches to business...........................................................................4
Analysis whether the traditional budgeting system is appropriate to the business in its planned
future form.................................................................................................................................6
Understanding of the alternative budget systems and the benefits offered by it.......................7
Application of the alternative budget system to the company and the potential problems they
may give rise to..........................................................................................................................8
Determination of a particular or a combination of the budgeting methods applicable to
business......................................................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................11

3BUSINESS FINANCE
Benefits of having a budget and the ways in which it helps business
The primary purpose of preparing a budget by an organization is that the management
of the company needs to measure the effectiveness of the implemented strategies and plans
and the exact or accurate margin by which the strategies are helping the company to extract
revenue from business. The primary motive behind every corporate organization is that the
entity strives for increased profitability through the economical uses of labor and resources
available in the organization. The execution of such a rigorous task requires a financial
structure or road map in order to enable the management of the company to allocate the
resources for the proper achievement of the organizational goals. Therefore, the significance
of budgets is imperative in the successful fulfillment of the company objectives. The benefits
of having a budget are that, the estimation of the probable income and expenditures of
business for a particular financial period, can be proposed and the required strategies or
planning can be constructed in the most effective and efficient way. Budgeting enables the
companies to restrict the flow of cash in and out of business by controlling the expenditures
and by allocating the resources in order to maximize the profits (Sekaran and Bougie 2016).
This also helps the companies to reflect the financial statements in such a way that the
stakeholders such as the investors, banks and shareholders get a clear direction in terms of
business proceedings. Intelligent budgeting helps the business to incorporate improved
decisions that increase the quality of business. A budget essentially deals in the review and
judgment of the past analyses and trends aims to prepare a report by estimating the future
values that the company is expected to deliver by optimally utilizing the resources. The
preparation of an efficient budget helps the management as well as the employees of an
organization to understand what results are expected out of them thus, plan and schedule their
work plan accordingly.