Manage budgets and financial plans Essay Example | Topics and Well Written Essays - 1750 words

Manage budgets and financial plans - Essay Example At present it is not unusual to have the budget function report to levels of management on top of the controller. Even though it is still accommodating for the budget director to report to the corporate controller, the approach toward reporting to a higher level is acknowledgment of the necessity to have the budget function commonly based in all operating areas of the business. Budget committee of Swann Communication is composed of representatives from most operating areas. This composition promotes synchronization. If correctly administered, the budget committee can achieve the exceptionally useful role of encompassing and reconciling the numerous diverse interests that make up a modern business. An effective budgeting system assists control. The budgeting system must fit the Swann Communication's operational control needs. The budget is considered as management's quantitative expression of plans for a forthcoming period. Budgets are prepared at different levels of the business. The Master budget is defined as the general financial plan for the period, which suggests the company's goals and objectives (Kemp, and Dunbar, 2003). Master budget of Swann Communication composes operating and financial budgets. The Operating budgets demonstrate the business' planned sales and operating expenses. The Financial budgets mirror financing plans such as borrowing, leasing, and cash management. Budgeting, when done correctly, can serve as a planning and controlling system. Swann Communication's goals and performance objectives are documented in financial terms. Once formulated, these plans are used all through the year. The monthly performance reports compare budgeted results with actual results. Management can inspect the performance reports and take required corrective actions to control operations. The role that successful budgeting plays in the management of Swann Communication is best understood when it is associated to the essentials of management. Numerous existing d efinitions of Swann Communication management can be expressed in terms of five key functions: planning, organizing, staffing, directing, and controlling. Planning and budgeting present a basis for assigning financial resources established on operational plans and objectives. For the reason of the intensifying complexity of business for the reason that of the movement in the direction of decentralization in big endeavors, augmented attention is being given to superior planning and control procedures. The management of Swann Communication must first plan. Plan is carried out by organizing, staffing, and directing operations. To control operations, management must institute proper techniques of observation and reporting to establish how actual results compare to plans. The budgeting is concerned mainly with the planning and controlling functions of management. Looking at how a budget is fabricated in the company will provide several insights into the fundamental aspects of budgeting. Primarily, the controller receives the operating plans of the line managers and other department heads and explains these plans into a comprehensive projection of financial condition and operating results. Final judgment should not be made until the outcome of the plans can be estimated by the CEO in terms of the impact on company resources and profits. Planning is considered to be future-oriented. The plan identifies