AYB225 - The Role of Budgeting for Growth at T&K Solutions, QUT

This essay argues against the notion that budgeting is a waste of time in a rapidly growing business, using T&K Solutions as a case study. It highlights the necessity of budgeting for forecasting, resource allocation, target setting, and controlled growth. The essay emphasizes the importance of involving staff in the budgeting process to foster ownership and improve departmental harmony. It also discusses how budgeting exposes weaknesses and strengths, facilitates corrective measures, and enhances communication. While acknowledging the limitations of budgeting, such as time consumption and reliance on estimates, the essay concludes that the benefits of budgeting, including long-term sustainability and competitive positioning, outweigh the drawbacks, making it essential for T&K Solutions to improve the profitability of its bookkeeping department.

I disagree with this statement that budgeting is a waste of time in a rapid growing business.
Budgeting is necessary for forecasting about the future because you must have a plan on how to
use the resources are available. These resources are divided in the most appropriate way,
maximize revenue and incase the resources are not enough you are able to prioritize things
according to their importance. In T & K solutions budgeting is necessary to ensure a smooth
running of all the three department. When you make a budget, targets are set that you are
supposed to achieve, this works as a guideline and a motivator, so unless the targets are hit one
should not rest. in T& K solutions though they are experiencing growth rapidly, when plans are
made this growth can be controlled and channeled to the direction the company wants to take.
With proper budgeting it can also be accelerated. (Bradshaw, J., & Brooks, M. 1996
p.548). Though the past information is important, it is not enough unless used in an appropriate
way to help you budget for the future. For a business to be successful it will depend on the
strategies, plan, policies and controls set. budgets come in handy because all the plans set have to
be broken down into monetary terms. In T& K solutions deliberate steps have to be taken and
plans made to ensure that the bookkeeping department is a success in the future. Profitability can
be improved for the book keeping department if proper budgeting is done for the department.
When budgeting is done there is improved harmony between the departments because they have
to work as a team to achieve targets. Like in T& K solutions, the staff should be involved in
making the set targets and budget because they have firsthand information on the requirement of
the clients and areas that needs to be improved. And because they have been involved they give
the budget ownership and work hard and with oneness to achieve all the set target in all the
departments.
Budget exposes areas of weakness and strength in a business this makes it easier for corrective
measures to be undertaken to improve on areas where the actual and budgeted is unfavorable,
because a specific area can come up, or it is easy to identify the area with problem. areas that
exhibits weakness more funds can be allocated to such department. Like in T& K solutions, if a
budget was set it could have guided the partners on which is best course of action to take. It
could also help them know why bookkeeping is lagging behind in profitability and if both the
taxation and business advisory that seem to be doing well are operating at their best.

When a budget is set it becomes the responsibility of all the department so close coordination is
required to achieve the set goals, this improves communication between employees because they
need to be consulting one another often. Like in T& K solutions, taxation and advisory
department can act as advertisers for each other and the bookkeeping department which is doing
poorly by letting their client know they offer book keeping services. (febmart, 2016 pp. 1)
Because targets are set with careful considerations of the operations of the business there is a
high probability of meeting them. In T& K solutions because they are growing at a fast rate this
growth factor should be included to ensure that the business does not deviate from the set targets.
When the employees are involved in the process of making the budget, they own the process so
they are motivated to achieve the set goal.
When you set budget you just compelled to think about the future of the business than just what
is happening today. (Jackson, S 2007 P. 327-328)
When you set a budget problem that may arise in the future are foreseen and adequate measures
are taken to either prevent it or to go through the problems without affecting the sustainability of
the business (Jackson, S 2007p.374)
And lastly budgeting helps you save a lot of resources and avoid debts. When you set a budget,
you know exactly what you need to have and in cases where it is not enough you are able to use
it in the order of their priority. When you don’t have a plan, you may use resources on things that
are not as important only to realize that some important items have been left out focusing you to
take a loan, or cause a loss in the area of concern.
Though budgeting is good it has some few limitations, budgeting process, is time consuming that
maybe a discouragement to many but this can be overcome because the results that will be
achieved by just doing a proper budget.
One can argue that when budgeting, you just work on estimates and assumption but these
estimates are made with an idea on what the past has been, trend in the market and factors that
may affect the business in the future so these estimates are not far off from the reality. Besides
budget should be surpassed.

One can argue that budget only focuses on financial goals but being a business the main of a
business is to maximize wealth and besides budget can be set for other activities that are
necessary for generating income like corporate responsibility activities which improves trust in
the society. The main concern of T & K solutions is the low profitability in book keeping
department.
In conclusion we can say it will be better for T& K solution to make a budget because though it
takes time it pays off and contribute to the long-term sustainability of a business, places the
business in a competitive position and eventually secures a greater market share of clients this is
by retaining current customers and getting new clients.
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Business Students. Juta and Company Ltd.
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febmart. (2016 March 24th). Advantages and disadvantages of budgeting | Febmat. Retrieved from
https://www.febmat.com/en/article-advantages-and-disadvantages-of-budgeting/

Jackson, S., Sawyers, R., & Jenkins, G. (2007). Managerial accounting: A focus on ethical
decision making. Cengage Learning.