g sales forecast expense expectations collections from debtors will provide you

G sales forecast expense expectations collections

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key assumptions (e.g. sales forecast, expense expectations, collections from debtors) will provide you with early identification of possible problem times and allow you to prepare various contingency plans (e.g. short-term borrowing). 11.16 LO2,4 6 Under what set of conditions will the budgetary system operate optimally? A serious attitude taken to the system by all levels of management, right from the very top. Clear demarcation between areas of responsibility of various managers so that accountability can more easily be ascribed for any area which seems to be going out of control. Budget targets being reasonable so that they represent a rigorous, yet achievable target. This may be promoted by managers being involved in setting their own targets. It is argued by some people that this can promote the managers’ commitment and motivation. Established data collection, analysis and dissemination routines which take the actual results, the budget figures and calculate and report the variances.
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Reports targeted at individual managers, rather than for general purpose. This avoids managers having to wade through reams of reports to find the part which is relevant to them. Fairly short reporting periods typically a month so that things cannot go too far wrong before they are picked up. Variance reports being produced and disseminated shortly after the end of the relevant reporting period. Action being taken to get operations back in control if they are shown to be out of control. 11.22 Give some examples of how a manager might achieve his or her budget by methods that are harmful to the organisation. How would you stop this?
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