Strategic Planning and Budgeting in Management Accounting

This article discusses the importance of strategic planning and budgeting in management accounting. It explains how strategic planning helps in identifying future needs and how budgeting is related to day-to-day expenses. The article also emphasizes the need to develop a link between strategic planning and budgeting for the development of business.

Running head: MANAGEMENT ACCOUNTING
MANAGEMENT ACCOUNTING
Name of the Student
Name of the University
Author Note

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Budget for a company when needs to develop, planning in a strategic way is needed to be
done. Planning in a strategic way helps in the identification of the strategies to be applied in the
future days. This help in defining the resources that are of need along with defined goals.
Strategic planning has been in practice by most of the companies as it is the ultimate way
to reach the goals that have been set by the company. Budgeting only helps in accomplishing the
goals that have been set by the company. Most of the companies that want to expand their
business develops strategic planning as they develop the plan of action according to that way. As
opined by De Baerdemaeker and Bruggeman (2015), the strategic plan mainly predicts the future
of the market and made an analysis based on that. In order to maintain the facilities in future
strategic planning is of need as it helps in the identification of the investments.
Almost all companies develop budgeting based on strategic planning. A company that is
going to expand its business globally made budgeting based on strategic planning. Budgeting is
related to the day to day expanse whereas strategic planning is not associated with the day to day
expenses. People who have been in the management of a company need to develop a link
between strategic planning and budgeting. This link needs to be developed in such a way that a
focus must be on the short term goals of the company along with the long term goals (Gigliotti &
Ruben, 2017).
Strategic planning is found to be done by the top management as it forecast the future
plans of the company. Budgeting, on the other hand, has been found to be taken into
consideration not only by the top management but too by the mid-level-management and by the
management that looks for the operation of the company. With the passage of time planning in a
strategic way and budgeting found to develop based on the information gathered by the

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company. Information if not been gathered by the company will not help in developing staregic
planning and that affects developing the budget (Kewo, 2014).
Developing the link of budgeting and strategic planning is that it helps a company to have
the financial resources that help in meeting future needs. As stated by Vishnevskiy, Karasev and
Meissner (2016), without having a plan it is not possible to develop business and take a look at
the needs that the company needed in future days. In this way, strategic planning and budget are
associated with each other and that both are required for the development of business.
In conclusion, it can be said that strategic planning helps the company to look for future
needs and based on that a company made a budget. Budget, although can be assisted by the other
management team strategic planning, is done only by the top management so that organizational
employees can be directed to work accordingly.

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References
De Baerdemaeker, J., & Bruggeman, W. (2015). The impact of participation in strategic planning
on managers’ creation of budgetary slack: The mediating role of autonomous motivation
and affective organisational commitment. Management Accounting Research, 29, 1-12.
Gigliotti, R. A., & Ruben, B. D. (2017). Preparing higher education leaders: A conceptual,
strategic, and operational approach. Journal of Leadership Education, 16(1), 96-114.
Kewo, C. L. (2014). The Effect of Participative Budgeting, Budget Goal Clarity and Internal
Control Implementation on Managerial Performance. Research Journal of Finance and
Accounting, 5(12), 81-87.
Vishnevskiy, K., Karasev, O., & Meissner, D. (2016). Integrated roadmaps for strategic
management and planning. Technological Forecasting and Social Change, 110, 153-166.

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