Management Accounting: Budgeting and Budgeting Systems

Management Accounting

Table of Contents
INTRODUCTION.................................................................................................................................3
Part A....................................................................................................................................................3
Budgeting..........................................................................................................................................3
Types of budgeting............................................................................................................................3
Role of Budget in business decision making.....................................................................................3
Changing environments.....................................................................................................................4
Real world example...........................................................................................................................4
Part B.....................................................................................................................................................5
Budgeting systems.............................................................................................................................5
Participative Budgeting.....................................................................................................................5
CONCLUSION.....................................................................................................................................5
REFERENCES......................................................................................................................................7

INTRODUCTION
Management accounting is all about managing the accounting transactions entertained
by company in a respective financial year. This report is based on the case study of Softconic
Company. This is an information technology company and engaged in selling various
technological solutions to all its customers. In this report different aspects related to
budgeting will be discussed. Henceforth, report will emphasis on budgeting and different
types of budgeting system management accounting has. In what manner the budgeting helps
management of company to take business decision will also be discussed. What is suitable for
changing environment will also discuss in this report. Furthermore, detailed discussion over
budgeting system would also discuss in this report. Detailed information over participative
budgeting will be discussed. How does the budgeting help in making decision in changing
environment will also analyse in this report.
Part A
Budgeting
Budgeting is all about analysing the financial requirements of company and based on
the analysis [proper budget is prepare to match such financial needs of company. Budgeting
is a predetermined report of company’s financial need in coming year (Aziz and Shah, 2020).
This includes all such expenses that company will entertain potentially in the coming year.
This involves all fixed and flexible nature of expenditure company will entertain in the
respective financial year. Budgeting is conducted so that all financial requirements or
liquidity needs of company can be managed effectively.
Types of budgeting
Budgeting is of different types. On the basis of the needs and requirements of
company different types of budgets are prepared. Budgets are off different types that are
titled as sales budget, overhead budget, personal budget, fixed budget, flexible budget, master
budget and many other types of budgets are prepared under management accounting. All
these budgets have its own significance for taking business decisions.
Role of Budget in business decision making
Budgeting play the following roles in the business decision making.