Short Term Budgeting

Budget for the Short-Term

Budget for the Short-Term

Introduction

A short term budget may be defined as, a financial plan of income and expenses expected over a certain period of time used to achieve a business's objective (Pub 1979, p.28). Accounting is an important part of budgeting because it enables to identify, analyze, measure and report the information related to finance. Budget is useful to control a business because of its ability to represent the plan of a firm. If short term budgeting is done in the right manner, it can force better thinking and ideas about the goals and purposes the firm likes to achieve. A clear thinking is required in order to make a realistic budget plan.

Author's Perspective

In this chapter, the author is trying to explain the different aspects associated with short term budgeting in a business organization. In author's point of view, short term budgeting is a short step towards long term success for the company as well as for the individual. The author considers organization's manager as the focal point of planning and managing the budget process. According to him, manager alone can not handle the entire process. Therefore, he must involve other important staff members in order to plan and then accomplish a short term budget. A team of different level of organization's member is important for budget making because the manager alone does not have the clear picture and information of the entire firm because he usually works at the managerial level.

The author further illustrates the importance of responding quickly to events which appear as surprises for the organization (Gayle 2001, p.23). We do not have the ability to see our future; therefore, we can only assume and predict what can come in front of us in the budget. There is a high probability that we face certain situations that are not planned in the budget. So, the manager must be able to make changing in the plan as quickly as possible along with his team to negate the chances of budget failure or any form of loss. The author moves on to describe both the positives and the negatives of implementing budget in a business organization.

My Reaction after the reading

After reading the chapter, I have words of praise as well as a little sense of criticism for the author. The praising thing is that, he has intelligently explained all the concepts and ideas related ...