Respond to 2 Colleagues 1 paragraph each- Accounting

Respond to 2 Colleagues 1 paragraph each. Instructions and Assignment Attached. Use APA citations and References. wk2d2 responses

Budgeting is an important part of an organization’s overall planning. Through budgeting, each part of an organization’s structure can be identified for decision making and control. For example, if the budget shows that one million units are to be sold in the next 3 months, the sales department knows that it must achieve that goal. At the end of the first month, the sales department can determine by looking at the budget if it is on track or not and what decisions it must make to meet the goal. A reasonable budget can allow an organization to allocate resources and provide a plan and direction for the organization. A budget can also help measure performance and ensure that managers are held accountable for their decisions.

To prepare for this Discussion, “Shared Practice: Evaluating the Budgeting Process,” take a moment to think about your organization or an organization you are familiar with. Consider the importance of the budgeting process, forecasting, and strategic planning for informing how the organization operates with regard to decision making.

**Respond

 

to two or more of your colleagues in one or more of the following ways:

· Comment on the use of budgeting tools and the budgeting process in your colleagues’ various organizations. Support your comments with the resources for the week and additional research.

· Validate an idea presented by a colleague based on your own experience, the resources for the week, and additional research.

1st Colleague to respond to:

In my organization, we usually start the financial year with the game-plans where each department sets objectives and targets, and from that, we draft a tactical plan with the resources that will be needed. Then we put a different meeting with our finance specialist to assist with the forecast, and for that, the historical data plays a critical role to work on the budget for the actual year with few adjustments based on new projects. Usually, in my organization, the forecast is revised quarterly for possible adjustments. “Forecast uses accumulated historical data and market conditions to predict financial outcomes for future months or years…..and can be adjustable once new information is available” (Rouse, n.d.).

 

The tools my company use are “IBM Cognos TM1” software, and currently, we are migrating to “OneStream” software, and from there the information is then moved to SAP which is the ERP (Enterprise Resource Planning) my company utilizes.

The key stakeholders involved in the budgeting process a part of the financial specialist and accountants we have the end-users represented by the managers and heads of departments of operations, and supporting services like the medical station, fire brigade, safety department, supply chain, human resources and training, constructions services and projects. During the budgeting process, there is a lot of discussion, decision-making and consensus-building (Zimmerman, 2017, p. 242).

 

In my company, the budgeting approach was usually bottom-up where the cost owners and end-users typically lower-level managers, however, since the company’s financial health became a concern, there is more intervention from the top management in the budget creation, and the top-down approach prevails, and they impose limits, negotiate areas for saving, projects to be postponed and many other measures that promote cash conservation. In many ways, the departments are allocated a certain amount ordinarily inferior to their forecast and must prioritize their activities to fit within the budget.

 
 

References

 

Rouse, M. (n.d.). Budgeting, planning and forecasting (BP&F). Retrieved from 

https://searcherp.techtarget.com/definition/budgeting-planning-and-forecasting-BPF

 

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

2nd Colleague to respond to:

Hello, everyone.  I have three examples for this discussion.  The first one is where I currently work.  It is a large teaching hospital with a considerable endowment.  I spoke to a process improvement officer who works with my department to streamline processes.  His department works on bettering performance throughout campus.

Language services are not reimbursed by health insurance companies, for the most part, so all hospitals are limited because they must pay for language services from their budget.  Thus, it is vital for the Interpreter Services Department to stay within budget and to look for additional ways that would allow us to render our services with the same quality level but with lower costs.  In other words, upper management allocates a lump sum to language services, which I will call a round hole for purposes of this discussion, and we must find a way to fit everything we do in that hole.  For purposes of this discussion, the services we provide are the quintessential square peg.

The tools we use for this are budgeting.  It is said by the literature that budgeting pressures “employees to achieve results” (Shastri & Stout, 2008).  This is the case with my hospital.  The executives tell us how much we have, and our manager finds a way to make it work within the parameters established by the regulatory authorities and hospital guidelines.

The second example is from my practice as an independent contractor.  I worked as a freelance medical interpreter when I was going through my undergraduate studies in public health.  As a freelancer, I was free to do with my time as I see fit.  I found out the hard way that when I worked more hours, I made more money, but my grades were lower.  Instinctively, I used a balanced score card tool at that time.  It is a tool used in strategic planning to sharpen focus, improve strategies, streamline business activities, and increase communications” (Kenton, 2019).  I used it in conjunction with budgeting to work smarter to achieve the throughput that would allow me to maintain an income level to help support my family while also leaving me with enough time to study en route to my undergraduate degree.

My third example is forecasting.  My hospital -and the entire world, for that matter- was hit by SARS-CoV-2.  Widely known as the coronavirus, SARS-CoV-2 causes the all-too-familiar COVID-19 symptoms.  Forecasting is a tool managers may use to predict trends (Tuovila, 2020).  Nobody had useful data on the financial impact of COVID-19, so executives gathered what they could from what happened in other countries in Asia and Europe that were hit before the United States, and new guidelines were handed down to my department regarding our budget in the face of the state-wide shutdowns.

Respectively, you can say that planning, budgeting, and forecasting help the entity internally by setting goals, figuring out what resources we have to achieve those goals, and predict how the company will perform based on past data and current and future circumstances.  They also help the company externally because the entity may include forecasts in its prospectus for investors looking into the company’s finances before they put money into the company.

 

References.

Kenton, W. (2019). Balance score card (BSC). For Investopedia. Retrieved on 11/13/2020 from 

https://www.investopedia.com/terms/b/balanced-score-card.asp

Shastri, K., & Stout, D. E. (2008). Budgeting: Perspectives from the real world. Management Accounting Quarterly, 10(1), 18–25.

Tuovila, A. (2020). Forecasting. For Investopedia. Retrieved on 11/13/2020 from 

https://www.investopedia.com/terms/f/forecasting.asp