Budget analysis of RDBS Corporation Essay Example | Topics and Well Written Essays - 1500 words

Budget analysis of RDBS Corporation - Essay Example The essay discusses that a budget is a manuscript that translates plans into money. It is a financial plan where the estimation of expenditure and revenue is done. The budget is an estimate, forecast about what you will need in fiscal terms to do your work. The budget is the most important tool in the business. It is almost impossible to run a business without having the budget. Budgeting is the process of preparing the budget, where the operational plans are the plans for real work. At the time of budget preparation, trade-offs and prioritization with program are ought to be made to make sure that the budget fits government policies and priorities. The cost effective variants which should be the best option for the organization must be selected. At last, the means of rising operational efficiency, which is effective, must be sought. None of these can be fulfilled unless financial constraints are built into the course from the starting. Budgeting is very responsible and difficult job . So, all the companies always depend on the experts in the field for preparing the budget. Incremental budgeting is a budgeting method where the budget is organized using a preceding period’s budget or else actual performance as a foundation with incremental amounts added for the new budget period. In the incremental budgeting, the actual performance of the company in the last months is taken into consideration and appropriate changes will be made for better result in upcoming months. This budgeting method encourages the spending of money up to the budget. Benefits that can be Realized from a Budgetary Control System: Maximization of Profit: The budgetary control system has an aim at the maximization of profits of the project. To attain this objective, a suitable plan and co-ordination of various functions are to be conducted. There is appropriate control over a diverse capital and revenue expenditures. The available resources are put into the best uses. Co-Ordination: Bette r co-ordination always results better profits. The functioning of the various units and sectors is correctly co-ordinate as a result of budgetary control system. The co-ordination of different executives and subordinates is essential for attaining the targets as specified in budgets. Tool for Measuring Performance: By giving the specific aims to various departments, budgetary control acts as a tool for measuring performance of companies. The fixed targets are compared to actual achievements and deviations are taken into consideration. Economy: The setting up of expenses will be methodical and there will be optimum economy in spending. The money will be put to use on the best. The ultimate benefits will go to the nation and it will be a national profit. The national assets will be used cost-effectively and wastage will be reduced. Consciousness: The budgetary control system helps in creating budget consciousness among the employees. By setting up targets for the workers, the system t ries to make the employees responsible towards their jobs. Every person knows what he is anticipated to do and he can do his work without any interruption. Reduces Costs: Now days, the business is so competitive and the role of budgetary control is significant. All the businessmen try to diminish the cost of manufacturing and rising sales. They will try to have those perfect mixtures of products where profitability is at the maximum. â€Å"The budget process consists of activities that encompass the development, implementation, and evaluation of a plan for the provision of services and capital