Managerial Accounting: Budgeting Process and Practices

Managerial Accounting
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Contents
Contents...........................................................................................................................................2
INTRODCUTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Explanation of budgeting process................................................................................................3
Explanation of how budgeting process satisfies the purpose of planning, controlling and
evaluating performance...............................................................................................................3
Explanation of to down and bottom down budgeting practices..................................................3
Evaluation of ‘traditional budgeting practices are constraint on creativity, and the time and
energy spent on budget formulation is better spent elsewhere’...................................................3
Recommendation related to budgeting for contemporary organisations for planning and
control purpose............................................................................................................................3
CONCLUSION................................................................................................................................3
REFRENCES...................................................................................................................................3
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INTRODCUTION
Managerial accounting is a process of identity, organizing controlling and interpretation
accounting information in a way though which manner able to take effective a successful
decision for business organization though which they can attain their predetermine goal. Various
tools are used by mange in this process . Budget are most essential method of managerial
accounting, In order to understand the concept of budget, review of Budget Efficiency for Cost
Control Purposes in Management Accounting System article written by Klychova G.S.,
Faskutdinova, M.S, Sadrivea . R all belongs from Kazan State Agricultural University Kazan,
420015,. The article published in Mediterranean Journal of Social Sciences, MCSER Publishing,
Rome-Italy. In this article , meaning of budget, process of budgeting, importance of budgeting in
planning, performance measurement and controlling proceeds has been identify in brief manner.
This reports also contains Uses of traditional budgeting and impact of modern budgeting
technique the organization in brief manner.
TASK 1
Explanation of budgeting process
 Budget can be defined as the planning of business activities which is related with
the future. It is a statement which shows the profit and loss expenditure in as
numerical data. Budget is prepared on the basis of data collected form prior
performance of business organization (Makarenko and Makarenko, 2018). It is the
essential part of management accounting procedure as mangers take decision on the
basis of budget information and it is used for proper allocation of economical
resources within the business organization. According to the journal article of
budgeting efficiency for cost control purpose in management accounting system,
Budget is a statement and procuring of preparation of budgeting is known as
budgeting, this technique is used for finding and set parameters, planning,
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movement and allocation of resources . It is a technique of analysing commercial
activities though which organization il be able to gerante profits .
budgeting is essential part of managerial accounting process and they use following
procedure for preparation of budget
 Defining budget objective: Budget process start end with operational planning. In
this process common goals are decided on the basis of which budgets are prepared.
In this process managerial goal are set it will help in identify resource requiem
during the overall budget process.
 Access historical and actual data: In the next step mangers collect data and
analysis their past performs of business activities. Managers able to understand in
which activity they need to focus to earn more profit and control cost.
 Developed base budget: In next step a base budget has been prepared which
provides basis guideline of management accountant through which they can
recognize all the activities and expenses incurred in future (Jie, Xi and Chaoyang,
2015).
 Access data and prepare budget: On the basis of based budget, managers
prepared their real budget for this purpose they use modern and traditional
budgeting techniques it is totally depend on the side of business organization and
mangers type of approaches they choose of preparation of budget. In most of large
organization use activity based budgeting technique.
 Review budget: After preparation of statement of budget, managers revise the
overall budget and check if any activity is not left doing the prepetition of budget.
 Monitor budget process: Budget is most essential part of managerial accounting.
On the basis of budgets, each and every activity of budget are monitor (XI and
XU, 2013).
Explanation of how budgeting process satisfies the purpose of planning, controlling and
evaluating performance.
Business organizations use different types of budgets. Theses budgets are useful for planning,
controlling and performance evaluation process. There will be many types of budget are prepared
which includes, master budge, capital budget, planned budget, financial and operating budget.
With the uses of minster budget organizations will be able o make future plans and plies.
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