Management 1 (Organizational Behaviour/Finance & Accounting) | 21. Budgeting and Budgetary Control by Abraham | Learn Smarter
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21. Budgeting and Budgetary Control

Budgeting is a core practice in organizations, focusing on planning, coordinating resources, and evaluating performance. It encompasses various types and processes to ensure effective financial management, especially in technology-driven industries. Understanding budgeting is crucial for engineers in managerial roles to align technical endeavors with financial objectives.

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Sections

  • 21

    Budgeting And Budgetary Control

    This section covers the fundamental concepts of budgeting, its objectives, types, and the process of budgetary control in organizations.

    Learning Practice

  • 21.1

    Meaning Of Budget And Budgeting

    This section defines a budget and budgeting, highlighting their importance in financial planning and control within organizations.

    Learning Practice

  • 21.1.1

    Budget

    A budget is a quantitative plan of an organization's expected revenues and expenditures for a future period, serving as a financial roadmap.

    Learning Practice

  • 21.1.2

    Budgeting

    Budgeting is the systematic process of preparing budgets to plan and control an organization's financial resources.

    Learning Practice

  • 21.2

    Objectives Of Budgeting

    Budgeting is crucial for planning, resource allocation, and performance evaluation in organizations.

    Learning Practice

  • 21.3

    Types Of Budgets

    This section introduces the various types of budgets used in organizations, categorized based on time, function, and flexibility.

    Learning Practice

  • 21.4

    Budgetary Control: Concept And Process

    Budgetary control involves monitoring and controlling organizational operations through the use of budgets.

    Learning Practice

  • 21.4.1

    Meaning

    Budgetary control is the process of using budgets to oversee and assess organizational performance against set financial targets.

    Learning Practice

  • 21.4.2

    Process Of Budgetary Control

    The process of budgetary control involves the use of budgets to monitor and manage organizational performance by comparing actual outcomes with planned targets.

    Learning Practice

  • 21.5

    Advantages Of Budgeting And Budgetary Control

    Budgeting and budgetary control provide a structured approach to financial management, enhancing decision-making and organizational efficiency.

    Learning Practice

  • 21.6

    Limitations Of Budgeting And Budgetary Control

    This section discusses the limitations of budgeting and budgetary control within organizations, emphasizing the challenges they face in flexibility, resource allocation, and accuracy.

    Learning Practice

  • 21.7

    Zero-Based Budgeting (Zbb)

    Zero-Based Budgeting (ZBB) is a budgeting method where every expense must be justified for each new period, starting from a 'zero base'.

    Learning Practice

  • 21.7.1

    Key Features Of Zbb

    Zero-Based Budgeting (ZBB) is a budgeting method that requires all expenses to be justified for each new period, rather than adjusting previous budgets.

    Learning Practice

  • 21.8

    Performance Budgeting

    Performance budgeting links resource allocation to the results achieved, emphasizing a results-oriented approach to budgeting.

    Learning Practice

  • 21.8.1

    Applications In Tech And Engineering

    Performance budgeting links resource allocation to results in tech projects, emphasizing milestone tracking for improved efficiency.

    Learning Practice

  • 21.9

    Budgeting In It And Tech Projects

    Budgeting is essential in IT projects to manage costs, prevent scope creep, and secure funding.

    Learning Practice

  • 21.9.1

    Why Budgeting Matters For Engineers

    Effective budgeting is essential for engineers to manage costs, align technical goals with financial viability, and ensure project success.

    Learning Practice

  • 21.9.2

    Common Budgeting Challenges In It

    This section outlines common challenges encountered in budgeting for IT projects, emphasizing the impact of changing technologies, uncertain timelines, and resource estimation issues.

    Learning Practice

  • 21.10

    Case Study: Budgeting In A Software Startup

    This section examines how a new AI-based health app startup effectively prepared and controlled its budget to achieve financial and operational goals.

    Learning Practice

  • 21.10.1

    Control Mechanism

    The control mechanism in budgeting ensures adherence to financial plans through regular reviews and adjustments.

    Learning Practice

References

Chapter_21_Budge.pdf

Class Notes

Memorization

What we have learnt

  • Budgeting serves as a finan...
  • Effective budgetary control...
  • Zero-Based Budgeting (ZBB) ...

Final Test

Revision Tests