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Principles and processes of financial planning
Principles and processes of financial planning
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This paper examines the strategic management sector pertaining to financial planning and decision making methods. Managers use these tools often, in order to carry on day to day operations at their firms. Finding the right combinations of cost allocation and implementing strategic measures, can be complex at times. However, to remain competitive in the industry, companies utilize benchmarking and other techniques in order to monitor their competitors’. This paper analyzes various approaches that managers may use, in order to make sound financial planning and decision making.
Strategic Management: Planning and Decision Making
The importance of an organization remaining successful, relies on various strategic
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Blocher et al (2013), added that at the end of an operating period, managers view the budget plan to interpret any variance between actual and budgeting expenditures and operating outcomes. Under certain circumstances, a firm uses a budget plan, to ensure accurate spending, monitoring costs, and to analyze a subunit’s accomplishment. For example, the government use these tactics when a fiscal year budget has not been approved; which is known as a continued resolution. The lawmakers allocate a portion of funds to sub-agencies in order to remain operational. However, the budget plan allows lawmakers to monitor costs, planning, spending and the sub-agency’s goals for accomplishments. Blocher et al (2013), indicates several components that make up a budget process, ranging from small firms which make take a few days or weeks to complete; corporations and government which may take an extended period of time.
• Budget Committees oversee all budget matters to include, allocating funds to the departments, coordinating budget preparation and justifications and monitors unit activities throughout the financing
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The information provided for Triple F Health Club, have a few issues. The first issue is the balance due for the new equipment, which is $15k and the company wants to invest in more equipment for $25k. Although the company plans to purchase the equipment in the upcoming year, the current balance due will reduce the overall earnings. Additionally, the company’s financial information and the owner’s personal account should not be recorded as one balance (providing it is the owner’s personal account). Another flag is the $2.5k balance for accounts payable (utilities and supplies). While it is a small amount, the company could pay it now instead of waiting for the next period. Also, the remaining balance on the mortgage may cause issues if the company’s liabilities increases or the projected number of patrons
The past four decades has seen Congress attempt to centralize the budget process and place restraints on overall spending. The passage in 1974 of the Budget and Impoundment Control Act, Congress established a new budget committee in each house. These committees receive the president’s budget and analysis provided by the Congressional Budget Office (CBO). The CBO was created with expertise equivalent to that possessed by the Executive branch. You could infer that creating such an office only implies more power to Congress considering they are working around the Executive branch in this instance. Although the president can recommend a budget for Congress to consider, the actual appropriation of funds is in the hands of the House and
For government budgeting to be effective, the process that guides it must be an evolving one. As the government gets bigger, it will most likely destabilize the existing method. Therefore, it must change to keep pace with the demands and growth of the country. The process must be capable of handling the complexity of our nation and its multifaceted needs so it will always need revisions and restructuring to face these new challenges. Its ultimate goal must be to reinforce the government and strengthen the country.
“After World War I, such arguments succeeded in rationalizing the budget process under the president’s authority: the 1921 Budget and Accounting Act gave presidents responsibility for overseeing individual agencies budget requires and unified; coordinated executive budget. A new organization, the Bureau of the Budget (BoB), was created within the Treasury Department to serve as the administration’s staff arm in endeavor” (Rudalevige,
Budgetary planning may differ between organizations. Single-period budgets and rolling budgets have methodologies that provide advantages and disadvantages that may make one budget time frame better than another. A single-period may require less time in planning during a fiscal year, but is less accurate than a rolling budget that is continuously planned on a repetitive basis. In either case, budgets are planned in advance in order for a company to operate profitably, and less so to have "actual results equal budgeted results." (p. 496)
In the annual budgeting stage of the legislators job they determine how much money is needed to keep government programs running. They usually work on subject like these during the Winter
Provides advice, assistance, and guidance on budgeting and related information to program managers and budget-related personnel in subordinate organizations. Conducts analyses, reviews, and special studies of budget and/or related information.
Participative Budgeting is the situation in which budgets are designed and set after input from subordinate managers, instead of merely being imposed. The idea behind this sort of budgeting is to assign responsibility to subordinate managers and place a form of personal ownership on the final budget. Nearly two decades of management accounting research has resulted in equivocal findings on the consequences and effects of participative budgeting (Lindquist 1995). Participative budgeting certainly has various advantages, these include the transferral of information from subordinate to superior increased job satisfaction for the subordinate, budgetary responsibility and goal congruence. Its disadvantages include budgetary slack and negative motivation, however it is the conditions in which participative budgeting takes place determines whether the budgeting process is successful. The conditions are dependent on various factors such as the level of participation, level of subordinate influence, the extent to which budgetary slack takes place, volatility, job related information, and the complexity of the budget.
Throughout the global economic environment the desire to out-perform the competition is always present. In every situation, the companies who do better are the ones with superior strategy (Rothaermel, 2013). Strategic management is therefore important in every company, no matter what industry or market they operate in; and as stated by M. Carpenter and G. Sanders, 2013, is described as "The process by which a firm manages the formulation and implementation of its strategy". Strategic management is a constant topic under discussion with different schools of theorists with different beliefs and attitudes which is described as "A tense array of disagreement" (Rees, 2012).
Wealth building and financial planning are very important when it comes to your future. Wealth can be built easily and if you are not careful lost in an instant. It is important for you to ensure that you always consult a financial advisor who will give you tips on how to build wealth and ensure that you have a safe and secure future. Patrick Dwyer Financial Advisor-tips for a secure financial future Patrick Dwyer is an esteemed private wealth and financial advisor with Merrill and Lynch at Miami.
A top-down approach empowers the leaders, including the president, CFO, board members, and other administrators, to make the budget decisions. This approach allows for expediency and works well in cultures that trust their leadership. In a collaborative approach, a variety of campus constitutes, including faculty, staff, and students, are involved in the budget process. Blezien and Graham suggested that it is best when the representatives are elected rather than appointed. This collaborative approach may provide increased understanding and acceptance of the budget process by the campus community; however, it could take more time to come to decisions due to scheduling meetings and navigating a variety of private
It is always changing. The constitution doesn’t specify how the federal budget process should work. Because of that, it has evolved and led to agencies like the Office of Management and Budget, the Government Accountability Office, and the Congressional Budget Office. They all play a critical role in creating the budget. The budget process will keep evolving over time.
A personal financial plan is essentially important for any person and their loved ones to minimize future hardships and difficult financial situations. Short and long-term financial freedom and stability is something an individual wants to have through to the end of his or her life. Financially planning for one’s retirement years is vital so a person does not sustain major unhappiness or unnecessary pain in what is supposed to be the reward for working so hard in their younger years.
Strategic management is a disciplined effort or control to make necessary decisions that have an effect on a business or an organization; the aim of strategic management is mainly to develop new, innovative or diverse ideas and opportunities for potential or development, and facilitates or assists an organization to achieve its goals (SM, 2010). In reality, strategic management not only can be used or applied to determine mission, vision and values or objectives, but it also establishes roles and responsibilities or timelines in a business (David, 2009). In the following sections, this study will focus on and examine the nature of strategy formulation, implementation, and evaluation activities, and analyze the potential pitfalls or risks in using a strategic-management approach to decision making.
This indicates the importance of strategic management for organisations in making appropriate decisions and selecting strategies which will assist them to gain strategic competitiveness and as a result earn above-average returns.
It requires an adequate and sound organizational structure, that is, there must be a definite assignment of responsibility for each function of the enterprise. Budgeting compels all the members of management, from the top to bottom to participate in the establishment of goals and plans. Budgeting compels departmental managers to make plans in harmony with the other departments and of the entire enterprise. Budgeting helps the management to put down in figures what is necessary for a satisfactory performance. Budgeting helps the management to plan for the most economical use of labor, material and capital. Budgeting tends to remove the cloud of uncertainty that exists in many organizations, especially among lower levels of management, relative to basic policies and objectives. Budgeting promotes an understanding among members of management of their co-workers' problems. Budgeting force management to give adequate attention to the effects of general business conditions. Budgeting aids in obtaining bank credit as banks commonly require a projection of future operations and cash flows to support