Budget Planning and Control

Background

GreenBOLD’s mission that goes, “Assist both the Small and theMedium Enterprises to do better,” tells much concerning thecompany. A majority of enterprises in the nation lack the returns orcompetence to employ full-time supervisory staffs, but they need theproficiency to be of assistance to them in driving their industriesforward. GreenBOLD poses as a business that has been in thechallenges for a couple of decades with their budget planning andcontrol processes (GreenBOLD). In addition, there have beenturbulences along their paths primarily between the owners of thecorporation and the team of the executives. The consultants of thecompany have been under pressure because of the situation when theyplay their roles in an attempt to have the matter of budget workedout in a harmonious mode (Buzicky, 2013). However, all the attemptshave been at a crossroad, therefore making the company to encounteradditional budgetary issues and this call for a preparation andmanagement of a budget plan.

Reasonsfor Preparing and Managing a Budget

To begin with, GreenBOLD needs to organize and manage its budget as away of enhancing control of the business. The owners should have asingle central budget that they can follow. This can help out inenabling the firm to cautiously control its expenditures in thecourse of the budget through a comparison to the master financialplan. In this view, the preparation and management of the budget canhelp GreenBOLD to avert overspending. The process can equally givethe corporation a standard to use in the evaluation of the firm. As aresult, in the process of monitoring the expenditures, the firm canalso regulate return inputs (GreenBOLD).

Secondly, the preparation and management of a budget plan can assistGreenBOLD in creating a monetary roadmap because the procedure canallow the company to have a meaningful way for its businessactivities. Furthermore, through this, GreenBOLD can be able toreview its budgets of the previous years to decide how well to followthe course of action and know the reason for account variances.Besides, not every budget variance can be an indicator of a negativeindustry position. If the differences occur as a result of anunforeseen increase in sales revenues, GreenBOLD can have a way ofincreasing the amounts in the budget for it future sales growths(Hofstede, 2012).

PositiveFinancial Outcomes for effective budgeting

A competently executed budget allows for the controlling of expenses.As a result, when GreenBOLD sustains an excellent method ofestablishing whether it is on a target, it will have the capacity tospend within its limits as a way of avoiding deficits. Because ofthis, effective way of budgeting helps as a financial guide withwhich the business will recognize how to determine whether it isstill on the correct path or not. Likewise, effective budgeting showswhere all the acquired profits should circulate or how GreenBOLD canutilize them and even its intended use. As a result, proper budgetinghelps in the completion of strategy. Secondly, an effective budgetmay help in showing the company how it can use it acquired financesto assist in its growth (Buzicky, 2013).Moreover, apart from helpingGreenBOLD to make the best use of its profits, it will also know howto increase the spending value (Hofstede, 2012).

NegativeFinancial Outcomes for improper budgeting

On the other hand, one financial outcome of poor budgeting is theloss of financial rewards. Consumers may associate the services ofGreenBOLD with elements of failure, leading to harm on the company’sinterests. Secondly, improper budgeting can lead to financial ofliability on GreenBOLD. The economic essence of this will be of aformal or legal characteristic, and this will depend on the serviceand the malfunctions within it (Buzicky, 2013).

High-levelbudget plan for Employee Training

Training of Employees

First Quarter

Second Quarter

Real Spending

$32,600

$24,100

Spending in Budget

$30,100

$30,100

Variances

$2,500

$6,000

%Variences

8.30%

-20.00%

AppropriateBudgeting Phases for GreenBOLD

1.Developmentof Operation Program

This phase incorporates the scheming of research and progress programthat indicates the priorities of the suggested project. In otherwords, this level is the most essential as it includes decisiveresolutions concerning the specific expenditures on researchactivities for the procedures of economic appraisal of the budget(Hofstede, 2012).

2.Conversioninto Budgets

The phase allocates estimated fund vales to the operating andfinancial plans already calculated in the preceding step. The fullcompletion of the stage involves the transformation of the ideas intomonetary values (Hofstede, 2012).

3Consolidationsegment

Thefinancial plan director of GreenBOLD needs to consolidate thedepartmental accounts into summaries of financial budgets the sameform as of the financial report (Hofstede, 2012).

BudgetManagement Techniques

The first method is the Zero-Based Budgeting that is a system thatneeds budgeting to begin with the hypothesis that each cost containsa zero level base. Afterward, GreenBOLD can consider working on eachitem that relates to expenditures and then the process that shouldfollow this is decision making as to whether the acquisition isessential.

Thesecond option that GreenBOLD can make use of is the Flexed Budgetingthat offers a way of relaxing the normal financial plan (Buzicky,2013). The company can achieve from this through its accuracy as itsbudget can suit a variety of small changes (Hofstede, 2012). Throughthis approach, GreenBOLD can have the capacity to present theinformation leading to an optimistic and attainable budget.

AnAction Plan to Resolve Budget Misalignment

First, GreenBOLD can begin combating the misappropriation by aligningits vision with its values and the people it serves. This is amechanism that integrates the basis all through the organization. Thecompany can ascertain this through collaboration with the team ofleadership who would help in cascading the strategies, visions,roles, values, and the anticipations down to the hierarchy. Thepreferred outcomes may result from the shared perceptive of the roleof everyone in causing the firm’s success, values, and vision. Theimpact is a tough managerial beliefs that support the overall driveand accomplishment. Secondly, even though revenue and expenseestimation poses as a defective skill, it can give GreenBOLD an ideaof the extra cash outlays needed to apply every area of the plan, aswell as the revenues the executives can anticipate generating(Buzicky, 2013).

BudgetingPractice to determine the Budget

Finally, in carrying out the action plan, the technique thatGreenBOLD can utilize is the Incremental Budgeting which is anapproach that joins the costs recognized from the precedingaccounting periods with the additional percentages. The fractions getutilized to cover up two important areas. These include costincrements due to inflations or the higher costs in purchasingtogether with the predictions related with increments in income andthe costs that come from business level predictions (Hofstede,2012).However, this technique may only fail to work with regards tothe manner of adding the percentages. More importantly, this may thenresult in GreenBOLD having to raise the prices of its sales to levelsthat are non-competitive (Welsch, 2012).

Conclusively, budget planning and control are two fundamental factorsin any organizations just as it is for GreenBold. However, thereparation of a significant budget calls for a company to understandits ultimate goals. Additionally, it is crucial for the management torealize that priorities are dynamic and this implies that thepreparation must make use of people with varied levels of expertisein order to come up with a comprehensive budget.

References

GreenBOLD.Barclays clearly business. 2016. Web. March 2. 2016.

&lthttp://www.greenbold.co.uk/about_greenbold.html&gt

Buzicky,a. (2013). .

Hofstede,G. H. (Ed.). (2012). The game of budget control. Routledge.

Welsch,G. A. (2012). Budgeting: profit planning and control. PrenticeHall.