Essay about master budgeting 11072014

Essay about master budgeting 11072014 Essay about master budgeting 11072014 A budget is a ï ¬ nancial plan of the resources needed to carry out tasks and meet ï ¬ nancial goals. A master budget is part of an overall organization plan for the next year, made up of three components: (1) organizational goals, (2) the strategic long-range proï ¬ t plan, and (3) the master budget (tactical short-range proï ¬ t plan). Long-range plans are achieved in year-by-year steps. The guidance is more speciï ¬ c for the coming year than it is for more distant years. The plan for the coming year is called the master budget. The master budget is also known as the static budget, the budget plan, or the planning budget. The income statement portion of the master budget is often called the proï ¬ t plan. The master budget indicates the sales levels, production and cost levels, income, and cash ï ¬â€šows anticipated for the coming year. In addition, these budget data are used to construct a budgeted statement of ï ¬ nancial position (balance sheet). Budgeting is a dynamic process that ties together goals, plans, decision making, and employee performance evaluation. The master budget and its relationship to other plans, accounting reports, and management decision-making processes are diagrammed in this diagram: Although each organization is unique in the way it puts together its budget, all budgeting processes share some common elements. After organizational goals, strategies, and long-range plans have been developed, work begins on the master budge, a detailed budget for the coming fiscal