Budget HCM 410 Essay Example

Type of paper: Essay

Topic: Budget, Budgeting, Finance, Bicycle, Cycle, Team, Decision, Teamwork

Pages: 1

Words: 275

Published: 2020/09/24

There are five main steps to budget building process:

Building a budget team: This is important so that representatives from all departments can be a part of the budget team and incorporate their ideas and suggestions in budget building (FMA, 2014).
Budget calendar: Calender is designed generally six months before the end of the fiscal year, and separate calendars are established for monitoring of the budget and internal management and reporting tasks. The Chief Financial Officer drafts the budget calendar and meeting dates (FMA, 2014).
Preparation for the budgeting process: This involves setting of goals, building up financial data and design of budget team. In this the design team help is taken, and the financial data is provided by the finance department. The CEO and CFO initialize this process and set key goals and budget targets. A budget kickoff meeting is conducted, and the budget agenda is discussed in detail (FMA, 2014).
Developing the budget: This involves forecasting the cash flows and current year financial ratios along with collecting the organizational budget, which is taken from each department head and then the budget is designed based on the important information. The board approval is taken in this phase.
Monitoring of the budget is performed by each department head as well as the finance department to ensure that the objectives are met, and the budget is not under or overpassed (FMA, 2014).

Flexible and static budget

A flexible budget is flexible in nature and changes according to the requirement of the situation. The flexible budget is more comprehensive and useful in comparison to the static budget, which does not change and remains static at one fixed pre-determine amount without determining the amount of activity occurred. On the other hand, a static budget does not change when the volume of activity changes. For example, if the company’s annual budget is static and the sales commission has been assigned an amount of US$ 50,000 annually, this amount will remain the same even if the sales increase annually.
Describe the budget cycle, the decision problems and the decision rule that may affect the relationship between departments and total facility?
The budget cycle refers to the cycle from the creation of the budget to the end of it. This is generally performed in the government organizations where the transparency of the budget is important and various decision problems can occur because of many steps, and phases are involved for approval of the budget in government organizations. The decision rules and problems can affect the total facility and department in the manner because the total facility may interfere in the departmental issues and not provide the autonomy to control its budgeting details on its own (Gail, 2010).

Reference

FMA (2014) A Five Step Guide to Budgeting, Fiscal Strength for Non-Profits http://www.wallacefoundation.org/knowledge-center/Resources-for-Financial-Management/Documents/A-Five-Step-Guide-to-Budget-Development.pdf
Gail S. (2010) What is Budget Cycle http://yourbusiness.azcentral.com/budget-cycle-2165.html

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WePapers. (2020, September, 24) Budget HCM 410 Essay Example. Retrieved October 27, 2020, from https://www.wepapers.com/samples/budget-hcm-410-essay-example/
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Budget HCM 410 Essay Example. Free Essay Examples - WePapers.com. https://www.wepapers.com/samples/budget-hcm-410-essay-example/. Published Sep 24, 2020. Accessed October 27, 2020.
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