Discussion

As the manager of the cost accounting department of Pride Company, what are some of the critical issues you need to inform your staff in preparing a budget for a global corporation? (300 words)

Also, need two replies 200 words each........

Replay 1:

Budget preparation includes the details of expenditures and costs of an organization. As the manager of the cost accounting department some of the critical issues that need to be informed to the staff  before  preparing a budget are as follows:

Accuracy of the information: When the company in question is a global one, it is difficult to keep track of the information. Since expenditures are recorded from every department it is very challenging to assimilate all those records and maintain accuracy. The staff needs to be informed to be very accurate in preparation of the budget because without that incorrect amounts will be recorded which might later confuse (Nwosu et al.,2020.

Lack of proper tools: There are many tools available that can help to make a budget analysis. But if the company cannot make the right choice for themselves, the staff can't do all the budget manually. There will always be the chance of getting inaccurate calculations.

Improper maintenance: Sometimes companies tend to make a budget but the expenditures and costs are not tallied with it properly (Sponem & Lambert, 2016). It is kept aside without paying heed to it. Therefore the staff needs to learn that the budget is being prepared not only as a mere task at the office but also because it has to be maintained sincerely.

Absence of a contingency plan: While planning the budget, the company must have a contingency plan which will be kept in the form of an emergency fund. Without such a fund as back up the company might fall into a severe situation in case there is a sudden halt in the flow of funds that is allotted in the budget.

Final consultation with all departments: Before finalizing the budget, it needs to be reviewed by all the departments, including the accounting department so that they can highlight their requirements before drawing the final confirmation on the budget (Schaltegger & Zvezdov, 2015). Without that, there might be confusion regarding funds later.

References

Nwosu, C. M., Aguh, S. P., & Ezeanyim, O. C. (2020). Multidimensional budgeting concepts and budget control modeling for production systems performance efficiency. International Journal of Engineering and Management Research (IJEMR), 10(4), 200-224.

Sponem, S., & Lambert, C. (2016). Exploring differences in budget characteristics, roles and satisfaction: A configurational approach. Management Accounting Research, 30, 47-61.

Schaltegger, S., & Zvezdov, D. (2015). Expanding material flow cost accounting. Framework, review and potentials. Journal of Cleaner Production, 108, 1333-1341.

Reply 2:

The budget for a global corporation should reflect the nature and scope of the corporation's activities, and the activities should inform the individual companies. If a budget were prepared based on the corporate situation, it would need to consider the factors including the size of the corporation, the position of shareholders, and the nature of operations of the corporation and also include the size of the businesses and the types of employment associated with those businesses. The first, to address the critical issue of unnecessary expenditure and expenses, is in the form of expenses. The second to address the current issue of overdue expenses and reduce the excess expenditure and thus improve management is to consider how we can reduce the excesses caused by such spending, including unnecessary expenditure about management. The third problem is to create efficiencies in the procurement system. The ability is to forecast the results of business and production activities accurately. It understands how to assess the performance of all critical parts of the business. Knowing how to evaluate the future direction of the business. It is being able to evaluate each branch's profitability with a view towards the outcome of each year's operating plans and planning for future growth, and understanding how to forecast the impact of capital and equipment expenditures on sales (Zimmerman, 2017). Understanding each business's performance and risk profile every quarter and analyzing the performance of its operations and the performance of companies that compete with the business. Understanding the corporate entity's financial condition and management in terms of capital, income, profit, and liabilities. Understand how to assess and manage the cash flow problems and identify the best possible way to use them. Knowing how to identify the most suitable ways to use all financial controls and understand the nature of financial management and the method and methods employed. It is essential to ensure the budgeting process is done by the needs of the corporation and the needs of the managers. For instance, the global corporation needs to have the staff's information and the managers at the top of the organization. The Budgeting Approach is a strategic approach that focuses on the organization's needs and the roles of each group in each department and then presents a budget for this team. Each department's roles must be specified by each department, but also for each group, and it needs to be specified by the management. For instance, for the IT department, a manager must specify the needs, and for all the other departments, needs must be specified by an individual (Zimmerman, 2017).

Reference

Zimmerman, J. L. (2017).  Accounting for decision making and control (9th ed.). New York, NY:  McGraw-Hill Education.