Purposes of budgeting (prime)
Planning
Responsibility
Integration
Motivation
Evaluation and control
The budgeting process…
Budgeting period-time
Budget manual-stages of the budget
Budget committee-decide the process
Budget coordinator-keeps everyone in line
Budget accountant-produces and issues the budget, monitors the money
What is the budget cycle?
Objectives
Budgets
Operating
Comparison
What is top-down budgeting
Senior management setting the budget with no help from lower level staff
What is bottom-up budgeting?
Each department setting their own budget by deciding what they can achieve, they are then passed up for review
What is negotiated budgeting?
Lower level staff and senior staff working together to create a budget
What is incremental budgeting?
Taking last year budget and increasing it slightly
What is zero based budgeting?
The budget is 0 and every expense has to be allowed by a manager
What is a rolling budget?
Amending the budget month on month to allow for changes in the marketplace
What is activity based budgeting?
Identifying the cause of the costs within the functions of the organisation
What is priority based budgeting?
Similar to zero based but it allocates growth and savings to the priorities
What is contingency based budgeting?
Dealing with unexpected financial problems that arise suddenly, some money is put to one side and is not allocated
