MB

• NATURE?

  important planning tool in management accounting to manage future entity activity
• purpose?

  set KPI

  Manage activity to accomplish KPI
• purpsoe?

  set KPI

  manage activity to accomplish KPI

  improve employee motivation to KPI

  Assess overall performance

  Identify areas of improvement
• operating budgets?

  daily operations

  involve sections of business that carry on business activities

  Forecast and plan for operational control and efficiency of firm

  
  

  BIS, expense, production sales, inventory, HR
• Financial?

  cash budget, capital expenditure, budgeted balance sheet

  projecting liquidity, financial position and capital expenditure of firm

  
  

  Forecast and plan for firm's liquidity and financial stability needs

  (EG. service debt on time, Increase market share, Attract investment)

  • est financial requirements covering long and short term est
  • Focus on CF based on est trading level
  • Spending plan for firm, detailing inc and exp
  • Plan business activities and serves as benchmarks for financial goals
• cash budget prepared on basis of ?

  cash accounting

  • shows inflows and outflows of cash over given period
• purpose?

  set KPI

  manage activity to accomplish KPI

  improve employee motivation to KPI

  Assess overall performance

  Identify areas of improvement
• importance?

  collects all smaller budgets from departments and collates -> overarching planning tool

  • direct resource allocation to achieve goals
  • overall summary of financial needs
• BIS?

  Budget lists projected income and expenses to determine projected profit.

  • Lists regular/irregular activities of possible income sources
  • Lists all possible operating expenditures related to earning of income streams
• operating budget? (pt2)

  forecasts and plan for operation control and efficiency of business

  • detailed est of what firm expects in revenue and expense over period
  • review, adapt and enhance policies to improve HR maintenance
• financial goals 1

  enable firm to plan more effectively to decrease costs and thus decrease financial risk to firm. Once goals set -> design and use effective business strategy

  Regular internal audits: reveal changes needed to MB moving forward -> MB should be linked to any review of management policies

  Help ensure actual financial results support company goals; increase profitability and liquidity
• internal audit

  reveal changes needed to MB moving forward -> MB should be linked to any review of management policies

  • help ensure actual financial results support company goals
• How else does MB help financial goals

  Predict figures -> future -> predict future financial position and stability

  • allow firm to plan and boon from cash surplus and find funds to fill cash gaps -> allow firm to see est financial performance
  • Able firm to take action if future = unfave
• operational budgets?

  forecasts and plan for operation control and efficiency of business

  • detailed est of what firm expects in revenue and expense over period
  • review, adapt and enhance policies to improve
• importance?


  • collects all smaller budgets from departments and collates -> overarching planning tool
  • direct resource allocation to achieve goals
  • overall summary of financial needs