Concept of Budget And Budgetary control Assignment

Running Head: Accounts
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Project Report: Accounts

Accounts
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Contents
Introduction.......................................................................................................................3
Objectives of budget preparation......................................................................................3
Revenue and spending variances......................................................................................4
Variance activity...............................................................................................................5
Recommendation..............................................................................................................6
Conclusion........................................................................................................................6
References.........................................................................................................................8

Accounts
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Introduction:
Budgetary control is a system of management control that focuses on the spending
and actual income of the business in order to compare the planned income and expenses of
the business so that the forecasting of the business could be done and the better strategies
could be prepared for the betterment of the business (Madura, 2011). In this report, the case
of sky cafe has been studied in order to recognize the objectives of the budget preparation
along with the study of the variance analysis. On the basis of the report, it has been
recommended to the managers of Sky cafe that how could variances analysis help the
business to meet the main objectives of the business.
Objectives of budget preparation:
Almost all of the companies use the budgetary process in order to manage the
performance of the business and forecast the future performance of the company in order to
set, manage and alter the strategies of the business for the betterment of the company. The
budgetary process of a business is quite easier (Rabin, 2013). The main objectives of sky cafe
behind the budget preparation are as follows:
Provide structure:
A budgetary control is especially useful in Sky cafe in order to offer the guidance
about the direction and the current performance of the business so that the objectives of the
business could be met. It basically forms a basic structure for the employees of the Sky cafe
which must be followed by everyone so that the main goal of the business could be achieved.
A budget only offers the significant amount of structure to the management which is used by
them constantly in order to judge the people and meet the expectation line of the business
(Higgins, 2012).
Predict the cash flows:
A budgetary report is extremely useful for the Sky cafe and its managers to identify
the future income and expenses of the business so that the cash flows of the business could be
forecasted. It takes the concern on the seasonal sales, irregular sales pattern etc to measure
the required cash in the business. It explains that budget is quite important in a business in
order to forecast the future cash flows of the business and identify the required level of cash
in the business.