Accounting management assignment on: Essay help on budgeting and expenses

Q?? Write an essay on budgeting and expenses?Solution:

Introduction

This essay describes how the counterproductive effects associated with using budgets and targets in the compensation system and performance measurement of the organization. Although most analysts and managers recognize that the gaming of the budget is widespread and understands that the massive costs entails on the organization. The budget considered as the formal and comprehensive plan which anticipates the income and expenditures for the organization for the particular period. . In simple words, wealth hazard considered as the threat or risk to the financial health.  It is viewed that the budgeting can be a Wealth hazard because of the deficit in tax revenue and enhanced spending of the government. It is very clear that wealth hazard is moving very fast and there is very less time to manage and avoid it proactively. In general, the budget must contain all details of personnel, costs, and actions needed by project. It is very clear that when costs are skipped from the project then the project is not treated as feasible. The budget is reasonable when it is based upon actual costs.

This essay describes the counterproductive consequences related with implementing budgets and targets in the compensation system and performance measurement of the organization. It is advisable to make the changes in the monthly expenses to avert the major financial obstacle. To develop the personal wealth, the individual should learn to survive below the means. In simple words, wealth hazard considered as the threat or risk to the financial health (Attwood, 2007) A few instances comprise, job loss, uninsured claims of the medical, identification of theft and poor management of the credit. Yes, budgeting might be a Wealth Hazard because information taken from Bloomberg and IMF view that the forecast yearly Government Budget shortages throughout the world for year 2010-2012 shall be around 8 trillion. The International Monetary Fund has forecasted in April 2010 that these kinds of deficits would be financed by restricted group of savings. The major reason for the deficit is declined tax revenue and enhanced spending of the government. The deficit is due to lower tax rules and profits governing how the business depreciates the investments. Another reason could be rebates offered to the tax filers from economic law congress passed earlier this year.  The enhancement in the spending of the government is due to the government efforts for covering the insured deposits of the financial institutions with the help of FDIC. It is very clear that wealth hazard is moving very fast and there is very less time to manage and avoid it proactively (Don Slater, 2002).  The procedure of rectifying the damage from the wealth hazard might be quick or lengthy. For instance, one retired women in her 70s spent approximately $ 135000 and she got with the help of reverse mortgage in about 2.5 years. This example can be considered as the wealth hazard. It is not possible to recognize the trend of upcoming investment returns. It can be possible to create some predictions about the estimated long period cash flows in conditions of sum and timing.Paying individuals on the basis of their efficiency associates to the target or budget and make individuals to make the system to destroy the value in 2 major ways: both subordinates and superiors lies in the budgets formulation and the process of the budgeting of the unbiased information which is needed to integrate the activities of the organization and they make the targets or budgets realization to destroy the value of the organization. Although most analysts and managers recognize that the gaming of the budget is widespread and understands that the massive costs it entails on the organization and how to lower the cost. The budget considered as the formal and comprehensive plan which anticipates the income and expenditures for the organization for the particular period. Budgeting explains the entire process of using and preparing the budget. In general, budgets are referred as valuable tools for finances control, planning and affects of the budgeting from large corporations and governments to the small business and individuals and families (Robbins, 1996). The small business usually involves in budgeting for finding out the most effective strategies for creating the money and diversifying the base of the asset. Budgeting may assist the Company by using its human and financial resources in the way that best entails the current opportunities of the business.  The systems of the Budgeting serve numerous purposes with control and planning being two of significant functions. The authors reveal that it is on the management to choose which function must be more sufficient for the enterprise. For e.g. the authors claim that the greater firms must concentrate on coordination and control aspects of the budgeting, while small companies must be more focused with the aspects of the planning. Planning involves making objectives for enterprise and while control involves the accomplishment of the goals (Frank, 2009).  Small business which operates in competitive and uncertain environments is required to control and plan the operations because this shall assist managers to conduct the business successfully.

Intelligent budgeting contains judgment of the good business in the analysis and review of data pertinent and past trends to business (Walton, 1977).  This information helps the Company in actions associating to the kind of the business organization required, the sum of funds invested and numerous workers to recruit and the strategies of the marketing required. In budgeting, the Company generally makes both short term and long term plans to assist implement the strategies and to integrate the continuous evaluations of the performance. Budgeting might be costly and time consuming for the small business and it can offer a numerous benefits, comprising the enhanced costs awareness and coordination efforts regarding the goals of the Company, enhanced communication and the background for the evaluation of the performance. There are paths individuals may assist themselves with the capability of tracking the money (Sparrow &Cooper, 1998).  To have Budget, individual is required to make the goal and maintain the track of income and expenses and make the ways to cut the finances.  Ex ante Budgeting for the disasters stresses the procedure of understanding the expense of the public policy for recovery and relief of the disaster before the event of the loss. Ex post budgeting for the losses after transaction might be referred as the financial reporting as compared to budgeting and the revision of budget plan in the case of the new information. The sufficient functions of ex post and ex ante budgeting for the disasters are the basic components in designing efficient policies of the disaster. Particular attention is needed to the effects of the budgetary of procedural and federal action deciding the benefits expansion for victims. For e.g. Collection of insurance premiums and fees are required to enhance the savings in estimation of the future loss that are registered as the resources accessible for the spending to satisfy the current requirements, it is likely that the government shall succeed in enhancing global saving (Fong & Kleiner, 2004).

The action to the budget ex ante for the disasters should overcome of mishandling of the resources by the procedure makers.  If the funds are marked yearly for the response of the disaster, but real loss is less than the budgeted sum, then it might be complex to avert the reprogramming the amounts for other reasons (Mansell, 2004).  One path to minimize the risk is that the unused funds shall be raided for the government to buy the insurance from the private re-insurers. Eliminating budget gaming from the system of the management shall eradicate main forces creating to general loss of the integrity in the organization. Individuals are taught to lie in the system of pervasive budgeting because if individuals speak the truth then they get punished and on the others side if individuals lie then they get appreciated. It is very clear that the resolving of the problems may simply result in greater productivity and value enhances sometimes approximately to 50% to 100% enhancements in the productivity. On the other side, less dependence on the target and budget systems considered as the significant consequence of enhanced productivity of the LBO and entrepreneurial firms. Eliminating budget gaming from the system of the management shall eradicate main forces creating to general loss of coordination in organization. Individual must associate the budget to the objectives and actions as to evaluate the registered expenses.

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