The findings of the research will help to build recommendations and advice for the organization 2. This study is aimed at identifying problems, analyzing and making suggestions towards the current budgeting and budgetary control system practiced by Ernest Chemist based on the findings of the research.AbstractII 3. Cherrington, Hubbard and Luthy explain that, continuous budget requires that budget for the next fiscal year is revised and updated at the end of each quarter. Izhar supports the argument of Cherrington et al that the long-term budget is a financial translation of purposed future capital investment; development of new products and abandonment of existing ones, breaking into new market and soon, this, he stated looks several years ahead. An error in the key factor budget would throw out all the subsidiary budgets. Each period supplies the projected costs and revenues for a part of the company. The no of population increase from year to year in the organization, this cause migration to different part of Ethiopia. The second function that Izhar described is Co-ordination: left to their own, department manager may make decision about the future which is incompatible or even in conflict with other departments. They explain further that, the form of the budget varies from organization, but it is eventually summarized into the form of normal financial statements. The wereda were far 40km around the town wolkite and km far from the center Addis Ababa The area were the best known in natural resource like kotter gedra forest and fesa water. The major difference between budget and the financial statement is the data used to develop each, financial statement are based in actual result of past operations, where as budget are based on planned operations for a future time period, because of this budget is a performa statements. A master budget, or a profit plan, is comprehensive set of budgets covering all phase of an organizations operation for a specified period of time.
Here a budget committee may be set up comprising of high level executives in charge of the major functional divisional of the business.
Table System or techniques used by the organization to reduce budget deficit.
These authors emphasized that to be effective, budget must be aligned with the organizations strategies, appropriate for the organization performance management processes and must be involve processes that are valued based, consequential and continuous.
According to the finance head the type of budget system preferable during several year of experience are flexible budget. This may intend be divided into quarterly and monthly budgets.
Cherington P.It is also a tool for cash planning and control, because the cash budget detail is the expected cash receipt and disbursement for a designed time period, it helps to avoid the problem of either having idle cash on hand or suffering a cash shortage, However, if a cash shortage is expected, the cash budget includes weather shortages temporary or permanent, i. According to Appiah-Mensah , incremental budgets are like ordinary budgets, except that in the case of incremental budget, in the next budget period a fresh budget is not prepared only a percentage increase or decrease is made to either the previous budgetary estimates or the actual results. The processes will succeed only if middle, and lower level managers can see that top management truly is interested in the outcome and willing to reward people for meeting the budget goals. According to Brook and Palmer , it is a businesss financial control system. To reduce the organization budgetary performance problem what means the organization accomplish? Flexible budget is a technique, according to Cherrington, Hubbard and Luthy that used to adjust the budget for various level of business activity. A budget is different from a mere forecast, in that it is a formal management of events which are desired by management to take place in an organization within a defined period of time. Egan maintains that without effective controls, an enterprise will be at mercy of internal and external forces that can disrupt its efficiency, and when this occur such enterprise will not be able to combat such forces. Forms of budget vary from organization to organization. What is the major factor affecting the budgetary performance of the organization?
Much of the information of the budget is provided by managers and employees whose performance is then compared with the budget they develop. Finally I would likes to acknowledge all individual and institutions that have helped me materially and morally during the preparation of this paper.In which method use the organization inorder to know appropriate utilization of budget amount? A period budget is a forecast of operating results for segment or function or a company for a specific period of time, it is quantitative expression of planned activity and requires timely information and careful coordination. Human responsibilities and interaction principle First the section of a budget director and staff, if necessary a very important to an effective budgeting system. They concluded that budgetary control system plays a leading role in establishing an efficient management control system for creating a sustainable competitive advantage. This study attempts to give a good answer for why budgetary performance are assess on the organization and why budgetary performance are needed to the organization. In this regard the work of C. When using the factor in context of budgeting, it is sometimes called principal budget factor.
Ronald W. Budget follow-up principle Since the budget consist of projections and estimates, it is important that it be checked and corrected continuously.
As regards production, definite instructions regarding types, quantities materials, labour and other allowable expense are available similarly, from the point of view of finance; guidance is available with respect to working capital and capital expenditure to be incurred.
According to Appiah-Mensahincremental budgets are like ordinary budgets, except that in the case of incremental budget, in the next budget period a fresh budget is not prepared only a percentage increase or decrease is made to either the previous budgetary estimates or the actual results.
Determine the key factors or limiting factors.