Traditional Budgeting – Discussion Analysis 2022

Running head: TRADITIONAL BUDGETING – DISCUSSION
Traditional Budgeting – Discussion
Name of the Student
Name of the University
Author’s Note

TRADITIONAL BUDGETING – DISCUSSION1
Table of Contents
Requirement 1............................................................................................................................2
Requirement 2............................................................................................................................2
Requirement 3............................................................................................................................3
References..................................................................................................................................5

TRADITIONAL BUDGETING – DISCUSSION2
Requirement 1
Managements of the companies face certain challenges while incorporating the factors
involved in budgeting planning process (McLaney and Atrill 2014). First, at the time of
incorporating value creation in the budgeting planning process, it is not possible to
sufficiently connect financial investments to the outcome or results that limits the capability
for comprehending and analysing of real return on investments for any provided line of
business (Barasa et al. 2017). Second, business organizations develop traditional budgets as
per the request of the competing stakeholders and each of these stakeholders justify the
projected expenditures on the basis of the needs of the departments instead of the overall
organizational goals. This creates barriers in aligning organizational strategies with the
budget planning process (McLaney and Atrill 2014). Third, the presence of high rate of
incorrect accounting assumptions can be seen in the traditional budget planning process. This
leads to huge time commitments as well as tiresome manual inputs. These aspects together
create challenges for the organizational managers in the incorporation of the factors like
innovating, development of brand loyalty, quick response to the competitive threats and
others in the budget planning process (Cardoş 2014). These are the major challenges faced by
the managements.
Requirement 2
Hello Saf,
Thank you for your contribution on the topic of budgeting.
It is an important factor to know the fact that traditional budgeting has both the pros and cons
that need to be considered by the managements of the companies. Traditional budgeting is
one of the most important tools of financial planning. A traditional budget is the budget that
the managements of the companies develop by taking information from the previous year’s