Planning Tools of Budgetary Control and Their Importance

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Question 1. Planning tools of budgetary control and their importance.......................................3
Question 2. Preparation of budgets by help of planning tools.....................................................5
Question 3. Advantages and disadvantages KPI for businesses. ................................................5
Question 4. Role of management accounting profession in order to resolve financial issues.....6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The MA is an accounting system that assess companies day to day transaction including
both monetary and non monetary aspects for preparation of internal reports (Phan, Baird, 2017).
These reports are used by managers of businesses for purpose of taking corrective actions. In the
project report, Toshiba company is chosen in order for understanding in detailed manner. The
project report covers about tools of budgetary control and way through which companies sort out
monetary issue by implementation of management accounting systems (MAS) and planning
tools.
MAIN BODY
Question 1. Planning tools of budgetary control and their importance.
Budgetary control – This can be defined as a systematic process that starts with the
establishing monetary goals of different activities and the assess variation by comparing actual
results. Under this approach, different types of budgets are used in for setting of financial
objectives. Basically, the main purpose of budgetary control is to track the actual variance
between actual result and estimated outcomes. With the help of it, managers can prepare further
plans for enhancing the performance. Different forms of budgetary control are mentioned below
that are as follows :
 Cash flow budgeting – This can be defined as a kind of budget under which a projection
of entire cash receipts and expenses that are expected to be incur in a particular time
period (Yigitbasioglu, 2017). It can be prepared for different time segments such as for
monthly basis, quaternary basis and yearly. Like in the Toshiba company, their managers
are using information through this budget about future need of cash and accordingly
manager source of funds. It has some advantages and disadvantages like :
Advantages – It helps to companies' manager by providing actual data about expected need of
cash for compilation of related activities.
Disadvantages – Due to this budget, managers can not expand cash in different profitable
activities. It is so because this budget limits the spending ability of companies.
 Capital budgeting – It is associated with process of determining efficiency of companies'
highly expensive projects or investments. Such as in the Toshiba company, their