Time frame of a financial budget:
Budget is a time based activity according to timing it can be strategic, intermediate and operational .Budget is a planned activity which need to be controlled with a high motivation and with very effective communication skills and abilities between all the stakeholders and business units to achieve the complete profit plan. That’s the reason budget is a time based activity and to achieve the budgeted objectives the time series playing a very important role in the whole activity.
Budget is a time based activity according to timing it can be strategic, intermediate and operational .Budget is a planned activity which need to be controlled with a high motivation and with very effective communication skills and abilities between all the stakeholders and business units to achieve the complete profit plan. That’s the reason budget is a time based activity and to achieve the budgeted objectives the time series playing a very important role in the whole activity.
According to
the timing factor the financial budgeting divide in three main steps. That’s
Strategic, intermediate and operational. That’s sometimes known as the three
different kinds of the budgeting on time series basis.
When the
board of directors of a business meet and finalize the mission statement for
the business and make the clear objectives for that business that process also
include the business complete financial plan because the directors have the
complete information of the available funds for the business objectives.
Normally the strategic plan is based on mostly ten years or equal to it.
After the
board of directors mission and objectives finalization the intermediate level
managers meets and they start their planning to make a budget to achieve the
strategic objective of the business and they planned their activity for
approximately two years or make a budget forecast for the two years or lesser
than it.
Then the field level staff or supervisors planned their production units or departmental unit’s budgets according to the intermediate budgets or managers given budgets and they mostly planned for a whole financial year or for some periodic times within a year. That kind of budgeting in the timing series is known as the operational budgets.
That’s show
us that who the time series is important for a business and how a business
staff, managers and leadership giving it importance. The external and internal
timing factors can influence on the designed budgets. That’s the reason the business
units and departments always keep some flexibility in their budgets to achieve
the strategic mission and objective of the organization which is designed by
the board of directors during the designing of the Strategic budget.
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