Budgeting and Forecasting
In the article "All Together Now" in the Feb. 1, 1998 issue of CFO Magazine, the author, Cathy Lazere, explains why budgeting and forecasting must be linked with planning and performance. Most managers despise the thought of budgeting and forecasting because the processes are so time consuming. The two are seen by management as a way to appease the people at the executive levels. The main problem is that budgeting and forecasting are not usually linked with strategic planning and performance measurement. In a survey, many readers of CFO Magazine stated that a lack of a clear strategy was t
In another survey conducted by the magazine, over half of the people surveyed stated that the planning for the company is more dependent upon politics than it is on strategy. Most information is kept in its department, and it usually is not shared on any real-time basis. Managers must deal with the four aspects dealt with in this article. he main reason that they only put forth a small effort in their planning stages. Managers deal with budgeting, forecasting, planning, and performance. Almost every company has a large number of performance reports and huge budget reports. The first step is to "limit and standardize planning data". Only about 20% tie compensation to forecasting. Another step would be for a company-wide sharing of information. The rest of the article provides examples of each step listed above through companies such as Avon and Texaco. These are important aspects of almost all managerial positions, and this article shows that there should be a relationship between all of them. This article relates to managerial accounting in a number of ways. It is thought that is can be to a point. There are, however, a number of steps that a company can use to improve the relationship between budgeting, forecasting, planning, and performance.
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Acceptance Essays
