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Significance of Accounting in Budgeting Paper
Significance of Accounting in Budgeting Essay
Budgeting is a crucial area of business success. Effective budgeting propels businesses rather than mere budgeting. Moreover, budgeting is a key determinant of either the failure or success of the business ceteris paribus. However budgeting also entails numerous essentials that promote and determine a successful or unsuccessful budgeting process. Notably, an effective budgeting process expresses the goals and plans of an organization clearly (Penning, 2012). Additionally, it provides clear projections of future expected expenditures subject to an organization’s financial statements. Dear Haworth, this paper is about to dilate on the essentials of effective budgeting, the role of accounting in budgeting, and the responsibilities associated with management as far as budgeting is concerned.
Part A: Significance of Accounting in Budgeting
One of the major aspects that enables effective budgeting is efficient accounting that is transparent and subject to accounting principles. For instance, budgeting involves funds that ought to be real than imaginary (Lawrence & Klimberg, 2011). Therefore, accounting makes budgeting more real than an imaginary projection of the plans and future expenditure. For this reason, accounting plays an important role in effective budgeting.
Moreover, accounting is divided into numerous parts including management accounting, financial accounting, and cost accounting. Both types of accounting focus on coordinating business activities within an organization (Lawrence & Klimberg, 2011). Similarly, budgeting coordinates various individual budgets to allow the free flow of business activities and enable an integrated plan. Elaborately, each budget has an implication on the business. Budgeting needs an enormous support from the accounting domain to enhance the smooth running of the business and complete coordination of business activities.
Part B: Responsibilities of Management in Budgeting
Each area in the business domain requires the management to enhance controlling, staffing, coordinating, and planning factors. In the same manner, budgeting is a crucial business activity that necessitates management from all its angles. Planning is a function of management and a subordinate of budgeting (Penning, 2012). Management enhances the availability of sufficient funds to enable the implementation of the budget; this helps the company to manage well its debts as well as credits. Keeping finances on track is a vital issue in budgeting since it enables the stakeholders to map their spending plan and makes them manageable..................GET A PLAGIARISM FREE COPY