Applying the Budget System
This chapter discusses the considerations and techniques involved in the analysis, review, presentation, and approval of the budget.
Earlier chapters have described the need for the budget manager to issue both a comprehensive planning calendar and the statement of the chief executive officer (CEO) of overall corporate and divisional goals and objectives for the next planning period. The budget manager should also prepare a clear and concise planning manual containing completed examples of all forms that must be used by the divisions. Care must be taken to ensure that the forms are simple in format and easy to use.
Recognition needs to be made that there is no one overall budget system but rather a system of many little budgets that are combined to form the comprehensive overall company budget and projection. Further, care must be made to determine that the budgets are not only properly prepared but are providing the right information to establish areas of control, responsibility and accountability for areas where the outcomes can be measured and to effect the proper outcome from each department or subdepartment budget control person. Each department budget has to be integrated in a way that reflects the realistic manageable projected outcomes.
The manager responsible for the review, presentation, and approval process must ...