Business Finance InTRODUCTION 3 PART 13 1. Purpose and Process of Budgeting

BUSINESS FINANCE

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
1. Purpose and process of budgeting ..........................................................................................3
2. Application of traditional budgeting approach.......................................................................5
3. Is Traditional Budget System Is Appropriate For Future Business Operations......................6
PART 2............................................................................................................................................7
4 Different Budgeting Methods..................................................................................................7
5 Application Different Budgeting Method................................................................................8
6. Evaluate which method is appropriate for the company.........................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business finance means cash and credit score employed within the organisation. Thus, it's
miles required to buy property, products, raw materials and for the alternative drift of financial
operations. A budget is a formal declaration of expected profits and fees based on destiny plans
and targets. Thus, a price range is a record that administration makes to evaluate the income and
costs for an upcoming duration based on their objectives for the commercial enterprise.
However, the report will highlight the purpose of budgeting and along with that it will outline the
process of budgeting that will be followed by the company (Ylhäinen, 2017). Further, the
assignment will frame the application of traditional budgeting along with that it will comment on
the incremental budgeting which is inclusive of concrete framework, decentralization,
organisational culture etc. Moreover, the report will outline about the different budgeting
methods which is inclusive of rolling budgets, zero-based budgeting and activity based
budgeting. On the other hand, the project will comment on the applications of the above
mentioned method and along with that it will comment on the two methods which are
appropriate for the future operations of the company.
PART 1
1. Purpose and process of budgeting
Budgeting is a method of framing, enforcing and operating budgets. Thus, it's miles the
managerial procedure of planning the budget and implementing them, controlling of expenses
and the related techniques. Budgeting is the advanced level of accountancy for considering the
future context which suggests a precise direction of movement and no longer simply reporting.
Therefore, it is a fundamental part of such managerial guidelines for long term planning, cash
flow, capital outlay and project implementation.
Purpose
The general purpose of budgeting of snappy drinks is to plot specific levels of business
operations, arrange tasks of different sections of the company and to make certain effective
control over it. Further, budget helps to anticipate the company’s future income, production price
and other costs good to earn preferred amount of earnings and decrease the chance of losses.
Moreover, its purpose is to assume the company’s future monetary condition and future need for
budget to be hired in the enterprise which will keeping the company solvent (Bogsnes, 2016).

Further, the motive of budgeting is to give a financial framework for the choice making
system i.e. the planned action that the company have got deliberate for or not. Moreover, in
managing a commercial enterprise responsibly, expenses have to be managed properly.
Process of Budgeting
Each company require making the budget in order to keep the track and control the
expenses. Thus, increasing and coping with a price range is how organizations allocate, monitor
and plan financial spending. Further, a proper budgeting structure is the basis for suitable
business control, development and enhancement. Thus, while preparing budget, discipline and
designing should be the basis of a commercial enterprise budgeting structure.
Strategic Plan: A Strategic Plan of the snappy drinks is how the enterprise plans to
accomplish its goals. Thus, the first step within the budgeting method is to prepare a strategic
plan (Wildavsky,2017). Hence, the strategic plan helps to make sure that organizational sources
are used to assist the approach and development of the company. It way budgeting towards the
vision.
Business Goals: snappy drinks need to develop their goals and there objectives to be
responsible for achieving their pre-decided objectives. Thus, that is usually the duty of the
management crew, board or business proprietor. However, the budget will help the company by
providing the financial assets to achieve their objectives. For instance, if the company has fully
grown its facility and there is a goal to develop more space, there desires to be dollar budgeted to
amplify or flow the business operations.
Revenue Projections: revenue anticipation must be based totally on historical economic
performance, as well as proposed boom earnings. However, the planned growth can be linked to
organizational objectives of the snappy drinks and deliberate tasks on the way to provoke
commercial enterprise growth (Miller,2018.).
Fixed and Variable Cost Projections: fixed costs projections is absolutely counted of
searching on the month-to-month predictable prices that do not get change. On the other hand,
variable costs changes on a monthly basis, supply costs etc. Thus, these costs should be properly
planned and managed of the snappy drinks .