Role of Budgeting in Management Accounting - Amazon Case Study

Management Accounting

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Management accounting is related to the decision made by internal manager by reviewing
internal report in order to increase the company overall performance within a year (Arroyo,
2012). It help in making day to day smart decision which enables company to effectively use
their available resources and funds that support to reach the desired target in appropriate time. In
this report, Amazon is selected which make use of different budgets to runs their various
operation.
The report defines, role of budgeting in helping the manager to make valuable decision in
dynamic competitive environment. In addition static and flexible style of budgeting with its
merits and demerits are also elaborated in this report.
MAIN BODY
Budgeting is the most significant component of accounting and plays a crucial role in a
firm's operations planning as well as guarantees that adequate operational and financial
transactions are performed out effectively to increase revenue within Amazon. As company is
planning to add a technology age within its operation, thus it is very much crucial to make very
smart move to use the resources and operate operation as per the defined budgets. In fact,
accounting provides an overview of all operations and duties undertaken in an organization and
recognizes gap loops to be filled in the potential in order to prevent any significant problems that
may harm the institution. The following assumptions illustrate how budgeting plays a major role
in strategy development of respective firm are discussed as follows:
Formulation of desired activities: To operate a company organization efficiently and retain
its balance, the broader image of all operations and duties conducted within its flagship must be
caught. The management of both of these obligations includes accurate and productive
interventions. Budgeting involves updating all of an operating performance on a unified
system and metrics how efficient and productive these objectives are achieved. Addressing the
security flaws current enables businessmen to be particularly careful throughout the future.
Drawing of the Goal Map: In context of Amazon, to accomplish its objectives, manager must be
planned mostly during beginning phase. Thus, budgeting plays a significant part in offering
fiscal posture to a company's business agenda, enrolling every one of the objectives to be met in
a specified amount of time (Chenhall and Moers, 2015). Effective budgeting allows