Continuous Budgeting - Essay Example

Managing ‘in-process’: the diagnostic and interactive use of budgetary controls

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In continuous budgeting, managing accounts entails a process of solving problems by balancing tensions that are competing. Here, the accounting managers balance the need for being creative as well as innovation and controlling the finances of the organization. The managing ‘in-process’ is useful in executing this task. This is the flexibility of budgetary control seen in this process. The ‘managing in-process’ is directed to understanding what is happening. Managing ‘in-process’ works to ensure the collective action that is pro-active is maintained in achieving the goals of the company. Here, company information regarding its budget is used diagnostically for monitoring the operational performance, risks and opportunities. In this case, accounting managers make decisions in consultations with senior managers as well as other managers in the organization affected by the decisions that are made. . It means that measuring process and understanding what drives the performance are major tasks for ‘managing in-process’

The importance of hitting corporate targets: budgets and boundary systems

Hitting corporate targets through budgets and boundary systems is explained as essential in responding to changing situations and priorities by managers. In achieving budgetary targets managers are expected to see the big picture of their responsibility and making trade-offs where necessary so as to off-set the displacement. The expectations are important in the boundary system in ensuring that the budget flexibility is not utilized cavalierly. It is also important in ensuring that managers are aware of their actions and implications to the budget. In this case, managers are expected to be on the lookout on the decisions they make regarding budgetary targets and controls. 

Securing managers’ commitment to organizational goals

To secure the commitment of managers in using budgetary controls in methods that serve the strategic goals of the company depends on particular recommended courses of action. It is necessary to share an understanding of ways in which managers can best achieve these goals for the organization. Here, it requires reiteration of the company mission statement and a thoughtful control of the shared vision. It is also necessary to establish values by developing an organization culture over time. The PEP is said to play a crucial role in informing individuals about the strategic aims of the business and especially the main purpose. It is also important for managers to subordinates are involved in learning and understanding the corporate culture that guide activities for everyone. The achievement of aligning PEP process is toughened by the senior managers communicating the organizational culture to every person associated with the organization. Good deployment of the financial incentives for the organization is also important in enhancing the manager’s commitment to organizational goals.    

Continuous budgeting

In reconciling budget flexibility with budgetary control, continuous budgeting entails reviewing the performance activities occurring in the organization regarding the budgetary targets regularly. It also involves responding to the identified issues related to changes that are unexpected in the situations affecting the business or the staffs. It also entails looking at what needs to be changed so as to influence the response of circumstances that are unexpected. In this case, managers need to consider various imperatives that will meet their targets as well as courses of actions that will meet the overall objectives of the company.              

Concluding Comments

In conclusion, the study provides an excellent example of ways in which budgets can be deployed as a useful tool for administering a control system. The study is useful in both quantitative and qualitative data. The primary goal is to achieve managers who are aware. It means that the organization is the major focus for every budgetary decision made. Through the new way of responding to budgetary problems, companies can achieve predetermined targets and a creative response to unexpected contingencies.