Budgeting Process Paper

Budgeting is something that many of us do in our everyday life and is something that every business should do at some level or another. Whether a company has two employees, 200,000 employees, is making $10K or $1MM, having a budget is always a good idea. A well thought out budget should positively impact the business. The goal of a budget should be to ensure that the company controls expenses in effort to get to the desired bottom line. Hitting this bottom line can be hard. If employees do not buy in to the budget, hitting targets can be challenging and discounted. A company needs buy in from all management in order to get buy in from the employees. Managers should respect their role in implementing the budget and set realistic goals for the organization to meet (Edmonds, Tsay, B., & Olds, 2011). Having upper management supporting the budget raises awareness and provides more the staff buy in and also reinforces budget accountability (Pinga, 2015).

It takes time to prepare a budget and raise awareness of the expectations of it. That is why it is so important to have employees and management understands what goes into the budget and how what role they play in the budget or cost savings, etc. Many companies involve many parties in the budgeting process. Companies that use participative budgeting create an environment where expectations are clear and it has proved to be successful for many companies(Edmonds, Tsay, B., & Olds, 2011). At my company each manager is responsible for the budget of their department. They have bonus plans based on how actual expenses compare to the budget. This seems to be a great motivator at my company. It also allows management to understand the expenses more. It ultimately allows managers to influence their expenses and control their performance goals (Heinle, Ross, & Saouma,