ACCT 001 Lecture Notes - Lecture 22: Cash Flow, Budget, Pro Forma
9 Aug 2020
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Document Summary
Fixed and rolling budgets for planning and decision making. Companies are using enterprise resourcing planning (erp) systems as they link data across all areas of business. The use of zero-based budgets (require manages to build budgets from the group up): can be quite time consuming may do them every five years, etc. Participatory budget: starts with departmental managers and then flows up though management budgets estimates prepared and submitted to next level. Company as a whole integrates individual budgets. If managers are evaluated and compensated according to whether they adhered to the budget, they may pad the budget, thus making targets easier to reach: aka budget gaming". Interrelated set of budgets prepared by business. Sales forecast: combines sales budget to form starting points in preparation of production budgets, purchase budget labour budgets for respective companies. Sales budget: plans cash needs for manufacturing, merchandising, service cpy. Size and complexity of org determines sales forecasting system.
