MINISTRY OF EDUCATION REPUBLIC OF MOLDOVA Academy Of Economic Studies Of Moldova Faculty “Finance”


Scientific coordinator:

________________Vostricov Denis
University Lecturer Elaborated:

________________Secrieru Gheorghe
group FB-28K


Chișinău, 2011


Budgeting is an integral part of society. In todays hurry up and get it done society; every day we are trying to budget our time, our meals and our money. Unfortunately for many, most of this process is done mentally and never put on paper. Just as families’ budget time and money, business must also develop a financial plan; a


budget that is simply a formal written summary of company’s goals and intentions in terms of money. Therefore managers are more often concerned about their company’s future. Questions like What resources will the company need? When these resources will be needed? How to properly plan and allocate profit? – answers to these questions and to many others managers can find by compiling budgets. Budgets as financial plans that set out anticipated revenues and estimated expenditures over a certain period of time have long been in use. Since their inception in the 1920’s, every serious company has made them the central part of their planning and control system. Their ability to coordinate the allocation of resources through internal communication while at the same time serving as a means of expenditure authorization and evaluation base has made them the most important tool that is at managers’ disposal today when running a company. It is exactly this importance that has contributed to budgets’ longevity and caused them to remain relatively unchanged in their use since the first days of their existence. The Role of the researched topic: is to analyze the economic and financial essence of the budget towards an efficient financial planning. Also this project focuses on several subjects like basics of budgets, where it is presented a short review on functions that budgets can perform and the conflicts that might arise if one function takes action more than other that also are vital for the budgeting process. A point of view regarding the pioneers of budget implementation in companies, and first big companies that started using budgets on large-scale is represented in history of budgets. This project also pays attention to the process of budgeting where it reflects the main budgeting approaches and its administration, continuing with defining the major types of budgets and the relationships between them are. The first chapter of this project ends with the usage of budges in financial management of corporate by detailing its planning and control uses.


The next chapter continues with various advanced budgeting techniques, and the advantages and disadvantages of each technique in certain applications fields. A master budget preparation is presented step-by-step, detailing the key formulas of each 10 component parts of the master budget. Then continuing with a complex analysis method using budget of some key issues of a company’s financial “well-being”.

Chapter I. BUDGETING OVERVIEW 1.1 Basics of budgets
Firstly, a discussion on this topic with a simple definition of budget will be given. In short, budget can be defined as a quantitative economic plan made with regard to time. Therefore, for something to be characterized as a budget it must comprise the

In short and taken at its simplest level. budgets facilitate planning and resource allocation and help to enumerate. and it must be made within a certain period of time. if a budget is looked upon in its wider context. but many of those that collapse failed to plan” (Horngren. looking to the future and planning. but in reality it is much. 2000. whether or not expenses are in line with predicted levels. monetary terms. 178).5 quantities of economic resources to be allocated and used. which is what following text will definitely show. dissect and examine all of the products and services that a company offers to customers. It is a process that turns managers’ perspectives forward. itemize. much more than numbers on spreadsheets. managers are able to anticipate and correct potential problems before they arise. In this way the system provides sustainability to business processes within the company. a budget is a mathematical exercise. However. The purpose of budgeting is that it gives management an idea of how well a company is meeting their income goals. it has to be a plan – not a hope or a forecast but an authoritative intention. Budgets as management tools by themselves are neither good nor bad.e. In the words of one observer: “few businesses plan to fail. It is a process of the utmost importance to management. it has to be expressed in economic i. Budgeting may be defined quite simply as the process of compiling budgets and subsequently adhering to them as closely as possible. p. This system allows managers to focus on exploiting opportunities instead of. It is an objective measure of the financial structure of company’s operation and a tool that forces management to be accountable in a structured and objective way. When administered wisely. Thereby. Properly used. Only a plan that has such characteristics can be called a budget.Datar. budgeting can . Foster. How managers administer budgets is the key to their value. figuratively speaking and fighting fires. and how well controls are working. it can be defined as a management tool that puts executives in control of the financial health of their company.

management needs to build a budgeting system. 2. e) Instructing – a budget is often as much an executive order as an organizational plan since it lays down what must be done. Set acceptable targets for revenues and expenses. reduce unnecessary spending. Since budgeting as a process is very complex. therefore. Provide time and opportunity to formulate and evaluate options should obstacles arise. d) Communicating – by publishing the budget. management explicitly informs its subordinates as to what exactly they must be doing and what other parts of the organization will be doing. the major objectives of which are: 1. f) Authorizing – if a budget is a management instruction then conversely it is an authorization to take budgeted action. In order to achieve this. Increase the likelihood that targets will be reached. and departments . It may.are assembled into a coherent master picture that expresses the organization’s overall operational objectives and strategic goals. and clearly define how immediate steps can be taken to expand markets. divisions. 3.6 and should increase profits. it comes as no surprise that budgets are trying to fulfill numerous functions such as: a) Planning – a budget establishes a plan of action that enables management to know in advance the amounts and timing of the production factors required to meet desired levels of sales. c) Coordinating – a budget is where all the financial components of an organization - individual units. be regarded by subordinates as a management instruction. . b) Controlling – a budget can be used to help an organization reach its objectives by ensuring that each of the individual steps are taken as planned.

It is precisely because these requirements differ. The requirements that all these functions impose upon a budget make it difficult for one system to meet them providing a benchmark against which actual performance can be measured. Since there are three major roles for any budgeting system. but also by giving them the opportunity to manage their subordinates in a more professional manner. k) Educating – the educating effect of a budget is perhaps most evident when the process is introduced in a company.7 g) Motivating – in that a budget sets a target for the different members of the organization so that it can act to motivate them to try and attain their budgeted targets. In this way budgets emphasize even more the existing organizational structure within the company. that role conflicts in budgeting system arise. a budget clearly plays a crucial role in the important task of performance measurement. j) Delegating – budgets delegate responsibility to the managers who assume authority for a specified set of resources and activities. l) Better management of subordinates – a budget enhances the skills of operating managers not only by educating them about how the company functions. Operating managers learn not only the technical aspects of budgeting but also how the company functions and how their business units interact with others. h) Performance measuring . i) Decision-making – it should never be assumed that a budget is set in concrete and when changing course a well-designed budget is a very useful tool in evaluating the consequences of a proposed alternative since the effect of any change can be traced throughout the entire organization. at least three conflicts may arise: a) Planning versus motivation . These need to be appropriately dealt with so that dysfunctional behavior like budget padding or other damaging budget games for the company do not appear.

Fraser and Woodcock in 1995 survey showed that general uses of budgets can be divided into financial and operational type of uses. managers’ motivation can be impaired by rigid application of a “fixed standard” philosophy which doesn’t consider the impacts of uncontrollable or unforeseeable events and doesn’t allow for their removal from budget standards. On the other hand. c) Planning versus evaluation The planning role’s requirement of providing realistic assessment of future prospects can conflict with the need to eliminate the effects of uncontrollable or unforeseeable environmental variables from the budget used for evaluation purposes. the conflict between these requirements is considered a minor one since it can be considerably reduced if appropriate adjustments are done at the end of the budget period. Yet this kind of budget runs the risk of setting targets so low that motivation is adversely affected. these difficult yet attainable objectives lead to an overly optimistic budget and run the risk of falling short and under using company resources. b) Motivation versus evaluation There is a widely held belief that budget objectives should be set as fixed standards against which performance can be judged.1. On the other hand.8 For a budget to be most effective in the planning role. As can be seen in the previous paragraph. it should be based on a realistic assessment of the company’s operating capabilities and on management’s judgment about what is most likely to happen in the future. Figure 1. since to motivate properly. Yet. because they are separated in time. of the . Managers are also likely to be more committed to achieving this kind of objective since they know that the performance standards by which they are evaluated are not constantly changing. A survey conducted by Bunce.1 clearly indicates that. functions that typical budgets want to cover are very wide. budget objectives should be set higher than those for planning and be difficult. yet attainable. It comes then as no surprise that those budgets are being used today in practice for many purposes.

These are purposes for which budgets have not been used so much in the past. Woodcock Lionel. communication. cost control. The operational management uses of budgeting have been less common but the interviewed companies have concluded that. cash flow management and capital expenditure supervision. Of course. budgets are plans set for a certain period of time. such as a month. 1995 As stated in the opening definition. The most frequently used budgets are annual budgets that are subdivided by months for the first quarter and by quarters for the remainder of the year. actual time periods for which budgets are made depend mostly on their purpose and use.1 Source: Bunce Peter. quarter. but that companies must also pay attention to things like strategy. and it is solely the decision of individual companies as to what time periods will be utilized for their budgeting process. “Advanced Budgeting”. the most important are those financially oriented like the use of budgets for financial forecast. year and so on.1. they are of growing importance. The need to improve performance is intensifying to the point that it is no longer enough just to control costs. History of budgets . “Use of budgeting for management” Figure 1.9 various uses of budgeting for management. This time period is then usually broken into smaller sub periods. Fraser Robin. in today’s business environment. and employee evaluation.

The use of budgets as financial planning and control tools for business enterprises is historically a rather young phenomenon. There was. early budgetary principles in companies were mostly derived from the budget techniques in government. However. Many historians agree that early budgeting systems can be seen as a logical extension of Taylor’s Scientific Management from the shop floor to the total enterprise. the main inducement for the development of budgets and their implementation in European companies came from across the Atlantic in the years following the Second World War. the meaning of the word “budget” in 19th century slowly shifted to the financial plan itself. Budgets with their focus on cost control simply became a perfect management tool for that period of time. In the US. however. In Europe the idea of using budgets for business was firstly formulated by the French organization pioneer Henri Fayol (1841-1925).10 The English word “budget” stems from the French word “bougette” and the Latin word “bulga” which was a leather bag or a large-sized purse which travelers in medieval times hung on the saddle of their horse. which in the years between 1911 and 1935 conquered the US industry. . Another practical stimulus came from the ideas of the Czech entrepreneur Thomas Bata (1876-1925) who introduced the so-called departmental profit-and-loss-control as a tool for decentralizing his international shoe company into a federation of independently run small businesses. It was only then that budgets started to be considered as financial plans and not just as money bags. The other source of budgetary principles for business in the US was the Scientific Management Movement. it was not until the depression years after 1930 that budget control in US companies started to be implemented on a large-scale. The treasurer’s “bougette” was the predecessor to the small leather case from which finance ministries even today in countries like Great Britain and Holland present their yearly financial plan for the state. initially only for governments and then later for private and legal entities. little application in practice. So after being used to describe the word wallet and then state finances. Nevertheless.

. In this kind of environment. first started to use budgets to support their rapid growth as they expanded into new products and markets. The only thing that has changed in the meantime is the competitive environment in which today’s companies operate and which has provoked many discussions about budgets’ disadvantages and their alternatives.11 Companies like “Du Pont” and “General Motors” in the U. which pioneered the M-form (multidivisional) organizational structure in the 1920's. if we look beyond many details and iterations of the usual budgeting process we can see that there is a simple universally applicable budgeting process. hopefully. “Siemens” in Germany. Budgeting Process The process of budgeting generally involves an iterative cycle which moves between targets of desirable performance and estimates of feasible performance until there is.S. the phases of which can be described in the following manner: a) Budget forms and instructions are distributed to all managers. it is was only in the 1960's that accountants started adding to budgets other functions (like management performance evaluation and motivation) in addition to those functions for which they had originally been devised . Alternatively. Foster and Datar: “the most widely used accounting tool for planning and controlling organizations”. In that period. and perform a proper allocation of internal capital and resources.. The enormous diversity in the product markets served by these vertically integrated corporations required new systems and measures to coordinate dispersed and decentralized activities. However. convergence to a plan which is both feasible and acceptable. This is exactly how budgets have remained to this day. budgets became the central and most important activity within management accounting or in the words of Horngren. budgets and ROI measure rightly played a key role in permitting central management to coordinate.planning and control. This was to help them to reduce the complexity of managing multiple strategies. motivate and evaluate the performance of their divisional managers. and “Saint Gobain” and “Eléctricité de France” in France.

Figure 1. c) The individual budgets are transformed into appropriate budgeting/accounting terms and consolidated into one overall company budget. modified as necessary. the budgeting process. and approved. d) The budget is reviewed. The inevitable dependence of individual budgets on one another requires that budgets be prepared in a hierarchical manner. due to its linearity and iteration loop. Outline of the budgetary process .12 b) The budget forms are filled out and submitted. e) The final budget is then used throughout the year to control and measure the organization.1. This picture shows that despite having only a few general phases.2 indicates a common hierarchical form of the budgeting process together with the necessary data flow between particular budgets and phases of their making. are in fact a very complex and time consuming process.

external data. Thereby. London. These budget choices are: . “Management Accounting”. resources etc.13 organizational objectives and long range plans past results and performance internal data on capacities.1. these concerns vary according to whether the company intends to use its budgets primarily for planning or for control. 1996 Figure 1.2 Since it is so complex and important. economic trends. indices. There is a list of eight budget choices that managers have to be concerned with when setting up the budgeting system. the budgeting process requires lots of decision making on the particular choices that developers of budgets have at their disposal. market research budget comitee derive key forecasts prepare 倉 uantity�budgets with appropriate managers check feasibility and adherence to policies of quantity budgets amend if necessary produce financial budgets produce master budgets submit budgets to chief executive for approval publish agreed budgets for ensuing period recording of actual results actual budget comparison and identification of variances reporting to budget holders and senior management variance investigation developing solutions to problems revealed by budgetary control Source: Lucey Terry.

What degree of ''stretch'' should be incorporated into the budget. Whether it should be a rolling budget and how often it should be revised. 2. Individual operating units have very little. Whether it is to be prepared from the bottom-up or top-down. but specific amounts and budgeted account balances are not passed down to the . 3. 2. How it is to be implemented. 8. management’s choices on how to start creating budgets fall into one of three major approaches: 1.14 1. if any. 7. Bottom-up With the bottom-up approach the budget is established at the bottom levels of the organization . 5. 6. The levels beneath headquarters level receive the budget amounts “from the top” and they are expected to adhere to these given amounts. input into the determination of the budget amounts. these particular methods will be elaborated on in more detail. How the budget process is linked to the strategic planning process. 4.and then brought up to the corporate level. Generally. Top-down The top-down approach of budgeting means that upper management completes the budgeting process with minimal involvement from the management of individual operating units or departments. accounting theory suggests that large companies should be concerned more with operational efficiency and emphasize coordination and control aspects of budgets. departmental or cost/profit centre level . In the operating unit. while smaller innovative firms should concentrate more on the planning aspects of their budgets. Whether compensation/bonuses should be based on budgeted performance. What budget evaluation criteria should be used. Whether performance should be evaluated against the original budget or the one relating to the actual activity level of the organization. Since the first budget choice about the process used to create the budget is very important. Guidelines and targets are set at the corporate level.

1. All these approaches have their advantages and disadvantages and thus their use is efficient in certain conditions. Top-down/Bottom-up A top-down/bottom-up approach combines and balances the best elements of the two approaches. The budget process becomes collaboration between lower and top management rather than a one-way exercise. (Table 1. these entities are given the freedom to create their own budgets at the local level. 3. Rather.15 individual departments. This approach allows input from lower and upper management into the model. In the combined approach. All this is presented in the table below. lower management submits the budget to upper management and then upper management modifies the submitted budget to reflect the operational knowledge that they have.1) Top-down versus Bottom-up approach .

1 Source: Rasmussen Nils. Trends. “Budgeting: Technology.Employee involvement and motivation . divisions and their .Budget inputs from multiple sources can be easily consolidated Disadvantages When to be used As in every other system.Unable to access information at the source .Less administration and time needed to complete the budget .Inaccurate data .Lower management can produce relevant and accurate budgets .Communication among departments is poor .The company does not possess the tools that would allow easy consolidation and review of budgets from multiple business units Bottom-up .Lower management has the most knowledge about local operations . Software Selection and Implementation”. budgeting also has its own administration.Middle management is new and does not know the operations well .Corporate infrastructure supports communication among and within business units .Encourages communication among and within the various units/departments .Lower and middle management do not have time to create a budget .Departments are unlikely to have redundant or omitted data .Increased budget accuracy and more relevant variance analyses .Time-consuming .Inclusion of corporate interdependencies . New York. branches. Top-down Advantages . This is necessary since otherwise it would not be possible to coordinate such an important and large task which involves all departments.1.The company is very small and middle management has little additional information to contribute to the budgeting process .Employee motivation may become a problem .Allows management to incorporate their overall strategic plans into the budget .Middle management is not aware of all the anticipated changes and developments that will occur within the company . Eichorn Christopher.16 Table 1.Opportunism if used for evaluation purposes . 2000.

it is necessary to prepare a carefully thought-out timetable for all budget activities and avoid this situation. b) Budget officer In addition to the committee. budgets. and coordinating and briefing the committee members. Since delay in approving the master budget can have serious repercussions. what resources will be necessary to create these products or services. The task of the budget committee is to organize and supervise the preparation and administration of a company’s budgets. budgeting involves considerable management coordination from all parts of the enterprise and for this it is essential that a budget committee be set up with representatives from all departments. His/her work is essentially that of secretary to the committee. keeping managers to the budget timetable. The budget manual does not contain the actual . If these smaller budgets are not completed on time. but key. collecting data and opinions from all over the company. Adherence to such a timetable must be strictly enforced for the system to work. a budget officer should also be appointed.17 subsequent management layers. Tasks that a budget officer usually performs are: ensuring that the committee’s secretarial work is carried out and that instructions are passed on to the appropriate people. In addition. the preparation of the major budgets will be held up. d) Budget manual To assist everyone who is engaged in budgeting and budget administration. What can usually be found in most companies are the following aspects of budget administration: a) Budget committee Budgets should be set by managers since only they decide what kind of products or services will sell. which in turn will cause late finalization of the master budget and its ultimate approval. c) Budget timetable Major budgets are made up of smaller. a budget manual should be issued. and what prices should be obtained for them.

It usually contains sample forms and records to be used in the budgeting process. 2. budgets can be classified into two primary categories: 1. and analyzing the differences between them. labor. In Figure 1. all major budgets that can be used in a typical company and how they are linked and interconnected within the larger system of the master budget can be seen. is more of an instruction and information manual on the way budgeting operates in a particular organization and the reasons for having budgets. organizational structure and responsibilities. Operating budgets Operating budgets consist of plans for all those activities that make up the normal operations of the firm. In effect. materials. They include a cash budget.2.18 budgets for the period . 1. comparing actual results with the estimate. production. This confirms what has already been said about the budgeting process . Factors that are relevant in determining the type or style of an organization’s budget and its effects include: the type of organization. and the desired results of the budgeting process In general.1. these budgets reveal the influence of the operating budgets on the firm’s financial position and earnings potential. the leadership style. The basic concept of budgeting involves estimating future performance. capital expenditures budget and pro forma balance sheet and income statement. The main components of the firm’s operating budget include sales. Financial budgets Financial budgets are used to control the financial aspects of the business. a detailed description of the process and so on. . personalities of people affected by the budget.that individual budgets are dependent on one another which requires that they be prepared in a hierarchical manner. overheads and R&D budgets.2 Types of budgets A budget is not a unitary concept but varies from organization to organization. a list of accounting and control procedures. the method of preparation.

Using this approach. The authority to move money from one line item to another must be granted at a higher level. London. two major groups of budgets can be defined: a) Line-item budgets These are budgets where the name of each line is set. If one works within a line-item budget. as is the amount of money that can be spent on each item.2. one can not overspend a specific line item and then compensate this with savings on other line (or vice versa). 1996 Except for the usual division of companies’ budgets into operational and financial.19 Major budgets and their relationships finished goods stock budget production budget production overheads budget direct labor budget capital expenditure budget materials usage budget purchases budget creditors budget sales budget selling and distribution costs budget cash budget administration costs budget master budget debtors budget research and developmnet budget Figure 1. budgets can also be differentiated based on expenditure authority. .1 Source: Lucey Terry. “Management Accounting”.

budgetary planning and budgetary control. That is why in many instances short-term planning and budgetary planning are used as synonyms.20 b) Block budgets These are the opposites of line-item budgets. planning is the first important element of budgeting work. It includes establishing enterprise objectives. As long as the block of money is not overspent before the end of the year. period by period.1 will show. if one wants to spend more money on one item and less on another. connection between planning and budgeting is not isolated from influences of other elements that constitute corporate planning system and it is precisely the coherent functioning of the complete system that allows corporate planning to be implemented. Planning is one of the elementary functions of management. they become budgets. developing premises about the environment in which they are to be accomplished. Budgeting and planning process . It is the process of developing enterprise objectives and selecting a future course of action to accomplish them. Here a block of money is given. one is free to do so. later on. Thus budgets can be used as planning tools and control devices. through the budgetary process and its two elementary phases . It is a phase that involves the interpretation of the broader strategic policies derived during the formulation of strategy and their translation into more specific shorter-range plans. as Figure 1. 1. the budget remains under control. Since the budget is fundamentally a plan. Once these short-term plans are quantified. selecting a course of action for accomplishing the objectives. However.3.3 Usage of budgets in financial management Budget is a comprehensive tool that if applied correctly and managed in the right way it can perform a multitude of functions rather than forecasting expenses and revenues. initiating activities necessary to translate plans into action and current replanning to correct deficiencies. The details of the budget are presented but.

Trends. these two concepts usually function within a single budgeting system as can be seen in Figure 1. “Budgeting: Technology. Software Selection and Implementation”. while feedforward control is too risky.3. New York. . Since in any organizations it is unlikely that pure feedforward or pure feedback control could operate in isolation because feedback control is too slow. The difference between feedback and feedforward concepts is that feedback monitors past results to detect and correct disturbances to the plan. Apart from the purposes of setting desired objectives and goals and linking them with strategic long-range and tactical short-range plans.1 Source: Rasmussen Nils. i. the fundamental objective of management planning within budgeting system is to provide a feedforward process for operations and control. It is this feedforward process that renders the planning phase of the budgeting system vitally important since it allows control and corrections of plans before they are even implemented. feedforward warns. Eichorn Christopher. 2000. while feedforward reacts to immediate or forthcoming dangers by making adjustments to the system in advance in order to cope with the problem on time. feedback monitors.21 Planning &Target Setting Decision Making Management Vision and Leadership Budgetin g Reportin g& Analysis Figure 1.2.e.3.

This loop. and finally reports against the plan and generates management response. which is illustrated in Figure 1.22 Feedforward and feedback concepts within a budgeting system PLANNING Desired objectives and goals Strategic long-range Tactical short-range OPERATIONS Feedforward Actual activities Transformation of resources Measurement Evaluation CONTROL Actual and planned performance compared REPLANNING Feedback Figure 1. Gordon Paul.2 Source: Welsh Glenn. Budgetary control process usually functions in a closed loop. Hilton Ronald. starts with the planning phase. then records actual transactions. 1988 At the beginning of the period. At the end of the period.3. Control is achieved through continuous reporting of actual progress and expenditures relative to plans i.e. Englewood. The budgetary control process loop .3. budgets. the budget is a control device to measure performance against expectations so that future performance may be improved. “Budgeting: Profit Planning and Control”. The aim of budgetary control is to provide a formal basis for monitoring the progress of the organization as a whole and of its component parts towards achievement of the objectives specified in budgets.3. the budget is a plan.

from a control viewpoint. For this reason.3 Source: Lalli William. “Handbook of budgeting”. the flexible budget is developed using budgeted revenues or cost amounts based on the level of output actually achieved in the budget period. the fixed budget is likely to be inappropriate (unless by pure chance the actual level of activity turns out to be the same as the planned level .which is highly unlikely) and should not be used for control purposes. The fixed budget is based on the level of output planned at the start of the budget period. Chapter II.3. On the other hand.23 Budget Plan Managemet directives Execute Report Respond Analysis Evaluate Figure 1. In order to understand why only those budgets can be used for the accurate measurement of performance. firstly the difference between them and fixed budgets must be explained. a special type of budget is prepared called the flexible budget. Budget as a financial planning tool . 2003 For budgeting control purposes. New York. It is with respect to this sort of budget that the old saying “the budget is out of date before the budget period even begins” is often a correct one.

The zero-base approach requires each organization to evaluate and review all its programs and activities systematically on the basis of performance output as well as costs. Pyhrr for implementation at Texas Instruments in 1969. to emphasize managerial decision making first and numbers-oriented budgets second. and to increase the analysis of allocation alternatives.24 2. the basic steps to effective ZBB can still be identified: -Identify “decision units”. his/her activities and . Pyhrr advocated a budgeting system where managers need to build each year’s budget from the ground up. Although management approaches to the adoption of ZBB differ among organizations since the process must be adapted to fit the specific needs of each user. -Describe each decision unit as a “decision package”. and present their requests for appropriations in such a way that all funds can be allocated on the basis of cost/benefit or some similar kind of evaluative analysis. building a case for their spending as if no baseline exists . This process provides management with an operating tool to evaluate and allocate its resources effectively and efficiently. making them justify only those incremental increases while automatically accepting current levels of spending without question.1 Various Advanced Budgeting Techniques Modern zero-base budgeting (ZBB) methodology was developed by Peter A. This was in total contrast to the traditional budgeting process which allowed managers to start with last year’s expenditures and add a percent for inflation to come up with next year’s budget. The focuses of zero-base budgeting process are two basic questions: “Are the current activities efficient and effective?” and “Should current activities be eliminated or reduced to fund higher-priority or new programs?” ZBB is trying to find answers to these questions by using the decision-package ranking process. and communicating alternatives to higher levels of management. evaluating. and provides the individual manager with a mechanism for identifying.start from zero.

b) decide whether to approve it or disapprove it. the program by which the goals are to be achieved.identify alternative means for performing the same function. The decision package is a document that identifies and describes a specific activity in such a manner that management can: a) evaluate it and rank it against other activities competing for the same or similar limited resources. Incremental packages . and calculates the costs for each activity. • The manager then develops his/her final set of decision packages from his/her business. identifies the activities creating this expense. ZBB starts with the creation of decision packages which are the building blocks of ZBB.25 . There are two basic types of decision packages: 1.1. the alternatives to the program. s/he translates the packages into “business-as-usual” packages for the upcoming year. the consequences of not approving the package. and the expenditures of funds and personnel the activity requires. Each package includes a statement of the goals of the activity.reflect different levels of effort that may be expended on a specific function.1. Figure 2. presents the detailed process of decision packages’ formulation which can be described in the following steps: • Each manager takes his/her area’s forecasted expense level for the current year. 2. the benefits expected from the program. request and profit and loss account. • Once the manager has formulated his/her preliminary list of decision packages and has received the formalized set of assumptions about next year’s operations. -Allocate resources accordingly. Mutually exclusive packages .as-usual packages by segmenting each of them into mutually exclusive .Evaluate and rank all these packages by cost/benefit analysis to develop a budget.

“Handbook of budgeting”. This technique allows management to allocate its limited resources by listing all the packages identified in order of decreasing benefit to the company. Formulation of decision packages Formal assumptions about activity levels. and attach them to his/her final set. New York.26 and incremental packages wherever possible and noting the discarded alternatives.1 The second important phase of ZBB is the ranking process. The process itself follows a hierarchical structure of the company where at each level the decision packages are reviewed. and then forwarded to the next higher organizational level for the same procedure all the way to the top. the manager must establish a minimum level of effort. It also helps management to identify the benefits to be gained at each level of expenditure and to study the consequences of not approving additional decision packages ranked below that expenditure level. 2003 Figure 2. and then identify additional levels or increments as separate decision packages. etc Incremental packages & alternatives to business-as-usual decision packages Current operations broken into decision packages Business-as-usual packages for the upcoming year Activities where there are no logical alternatives. billings. or where the present method or level of activity is chosen All decision packages ranked together New-activity decision packages Source: Lalli William. the manager should identify all the new activities in his/her area for the upcoming year. which must be below the current level of operation. When determining incremental packages. The . wage & salary increases.1. develop the decision packages that handle them. • Finally. ranked and consolidated.

It can be said that the purpose of the ZBB process is to help management evaluate expenditures and make tradeoffs among current operations. • It is a systematic way of challenging the status quo and obliges the organization to examine alternative activities and existing costs behavior patterns and expenditure levels. • ZBB process leads to greater staff and management knowledge of the operations and activities of the organization and can increase motivation. obsolete or less cost-effective operations. • ZBB focuses attention on value for money and makes explicit the relationship between the input of resources and the output benefits. . development needs. • ZBB might be perceived as an implied threat to existing programs. it should result in a more efficient allocation of resources to activities and departments.27 organization’s final budget equals the sum of the budgets of those decision packages accepted for funding. Disadvantages of zero-base budgeting: • It is a time consuming process which can generate volumes of paper work. • The thought of creating a budget from scratch causes considerable resistance if support groups and training programs are not in place. • It develops a questioning attitude and makes it easier to identify inefficient. and profits for top management decision making and allocation of resources. • There is a considerable management skill required in both drawing up decision packages and in the ranking process. Advantages of zero-base budgeting: • Properly carried out. • There are considerable problems in ranking packages and there are inevitably many subjective judgments.

drawn mainly from priority base budgeting and total quality management. though most of the benefits that users of ZBB reported have been achieved in reallocating funds and reassigning areas.2 and are outlined below: • Planning process linked to the organization’s strategic objectives. personnel. operating at the activity level. ZBB has been used in situations where cost stabilization or control. ABB is designed as a management process. . production planning.28 Zero-base budgeting finds its main use in areas where expenditures are not determined directly by manufacturing operations themselves . R&D. Activity Based Budgeting The activity-based budgeting (ABB) approach. developed by consultants from Coopers and Lybrand Deloitte. it is suggested that it should be used as a short-term (usually one year) budgeting method which could be selectively applied on a rolling basis throughout the organization. maintenance. Its key features are shown in Figure 2. In many cases. data processing. • Analysis of discretionary spending options and priority ranking. • Identification of cost improvement opportunities. and so on. for continuous improvement in performance and costs. engineering. combines a number of well proven management practices. that is. finance. • Participative process to control and sustain continuous improvement. together with activity-based cost (ABC) management concepts. • Integration with activity planning and accounting to provide effective control. where the manager has the discretion to choose between different activities (and between different levels of activity) having different direct costs and benefits. Due to the large amount of time that it takes to prepare ZBB. These ordinarily include marketing.1. or even cost reduction was necessary. quality control.

• Change the focus from variable and fixed cost budgeting to used and unused capacity. Its main principles can be listed as: • Achieve excellence by eliminating waste and by reducing workload. not for blaming. “The Key Features of ABB”.2 Activity-based budgeting is a quantitative expression of the expected activities of the organization. Control the process rather than the results and understand underlying causes and effects. reflecting management’s forecast of workload and financial and non-financial requirements to meet agreed strategic goals and planned changes to improve performance. London. • Use features and customer characteristics to understand the source of product variation and how customers are creating it. .29 The Activity-Based Budgeting Process Strategy Planning guideline Activity Analysis Improvement options Budget proposals Priority lists Activity Based Costing Implement plans Activity based budgets Actuals Source: Brimson Jim. 1991 Figure 2. • Use mistakes for learning. • Synchronize and coordinate activities within and outside of the organization.1. Fraser Robin. • Include customers and suppliers in the decision-making process.

“The Key Features of ABB”. • Lower level managers and employees can more easily understand and communicate budgeting information in operational rather than financial terms. This highlights the sources of imbalances. • The ABB approach focuses on generating a budget explicitly from activities and resources. activity-based budgets can lead to improved performance evaluations by specifying accountability. which allows better product. the ABB approach avoids unnecessary calculations of the financial effect of operationally infeasible plans. inefficiencies. or activity costing and decision making. 1991 Figure 2. and bottlenecks. • The explicit analysis of resource capacity and the increased visibility of resource consumption allow organizations to identify capacity issues and make adjustments earlier in the budgeting process than in traditional budgeting processes. and better resource allocation to support organizational priorities. . process.3 Reosurces Reosurce Drivers Activities Activity Cost Drivers Product 1 Product 2 Product N Source: Brimson Jim.3 Advantages of the activity-based budgeting: • By first balancing operational requirements.30 A significant element of the Activity-Based Budgeting technique is the fact that it traces costs from products to activities and then from activities to resources as shown in Figure 2.1.1. Fraser Robin. London.

the ABB system is time consuming and cumbersome to maintain. in contrast to the traditional budgeting’s vertical orientation. having an activity-based mindset will greatly simplify and assist in the implementation of ABB especially if the company already has a strong informational support system. Although having an activity-based costing system is not a precondition for implementing activity-based budgeting. activities required to provide them. particularly for those involved in creating value in the product for the customer. • It is difficult and costly to implement if the company doesn’t already have activity- based costing system.31 • The activity-based approach reinforces horizontal process view of the organization cutting across departmental borders. Disadvantages of activity-based budgeting: • One potential limitation of this approach is information availability about activities. • Due to numerous cause-and-effect linkages among the demand for products and services. and the cost of creating and maintaining the information. . and the resources required to perform the activities. processes and resources. • The ultimate success of ABB depends heavily on management’s commitment to act on the data. It should be used where there is a need to understand the cost impact of significant changes in levels of activity and where a decision in one part of the organization affects another in order to ensure that there is an optimum allocation of scarce resources across the business. Activity-based budgeting is a planning and budgeting tool which works by understanding the linkages between the activities and the drivers behind them.

The Beyond Budgeting model represents a set of best practices . The principal features of Beyond Budgeting Model include: •Targets that are relative to the competition and thus are always self-adjusting and stretching the performance of the business unit. strategy and manage investments and •A rolling strategy process that is devolved to business unit teams and that operates within clear boundaries and values. a research project by CAM-I.which companies. are now using to respond to continuous market change. Their aims have been not only to reduce the costs of budgeting and implement more adaptive planning processes. They devised the model within the Beyond Budgeting Round Table (BBRT).from organization design and devolution of authority to planning and performance management . •Rewards based on relative performance at a business unit or company level that encourage team performance and cross-company sharing at various levels.32 Beyond Budgeting Model The Beyond Budgeting model was developed by consultants Jeremy Hope and Robin Fraser. which was set up in late 1997 by 33 companies in order to find out if traditional budgeting can be replaced. that have abandoned the traditional budgeting model in one form or another. unpredictable competition and increasing customer demands. The way these organizations dealt with rewards was a key determinant of a successful . •Effective anticipatory management systems that enable managers to continuously adjust shareholders expectations. •Distributed controls aimed at supporting front-line managers and keeping senior managers informed. but also to devolve the responsibility and the accountability to teams closer to customers. •An investment management process that forces managers to build flexibility and exit routes into their forecasts.

The more successful cases have based evaluation and rewards on relative improvement contracts with hindsight rather than on fixed performance contracts agreed upon in advance. It involves the implementation of various complicated systems (like ABC and BSC) and requires their harmonization in such way that not only the budgeting system. . which guarantees them practical usability. Advantages of the Beyond Budgeting Model are: • Above average financial results of the first companies that implemented the Beyond Budgeting models. Disadvantages of the Beyond Budgeting Model are: • The Beyond Budgeting model is not a standardized recipe type of solution for budgeting problems. • Despite being highly publicized by BBRT. This means that each company has to find its own combination of management tools and customize them to their internal budgeting system in order for BB model to work. there is very small number of companies that have decided to implement the Beyond Budgeting models and even fewer of those that managed to complete the process all the way. It is simply a set of best practices used by advanced companies that managed to successfully deal with certain shortcomings of traditional budgeting. but also organizational and cultural environments must radically be changed. • They offer a great deal of support to the decentralized type of companies that want to devolve the power of decision making to frontline managers and employees.33 transformation. • They are the results of various attempts of companies to deal with a growing amount of dissatisfaction with traditional budgeting in today’s business environment. • The BB concept is very difficult to implement.

a capital budget and much more. The master budget has two major parts including the operating budget and the financial budget (See Figure 2. or year.2 Preparing the Master Budget The master budget is the primary financial planning mechanism for an organization and also provides the foundation for a traditional financial control system. The financial budget includes the capital budget as well as a cash budget. for a month.2. e. 2. More specifically.g. and a budgeted balance sheet. The master budget includes many appropriation budgets (typically in the administrative and service areas) as well as flexible budgets.34 The Beyond Budgeting Model is efficient to be implemented by companies that operate in a highly competitive environment and which have already successfully implemented various management tools like the Balanced Scorecard. The operating budget begins with the sales budget and ends with the budgeted income statement.. quarter. it is a comprehensive integrated financial plan developed for a specific period of time. activity-based management or rolling forecasts. “Diagram of a Master Budget” .1).

2.. production. ending inventory. factory overhead. There is not a certain rule in which order the subbudgets must be prepared. direct materials.2. cycle time or lead time) as well as setup costs and carrying costs. selling & administrative and income statement. cost of goods sold. Considerations involve the time required to produce the product. .35 Figure 2. Sales Budget Developing a sales budget involves the following calculations: Budgeted Sales = Budgeted Unit Sales * Budgeted Sales Prices Current Period Cash Sales (2. direct labor.2. Below the steps and key elements in setting each of these sub-budgets will be described. elaboration of each component part of it is important.2) + Prior Period Credit Sales Collected in Current Period 2. but usually budget planners in big companies prepare them in the following order: sales.e.2.1 For preparing an efficient and accurate masters budget. or theoretically zero in a perfect situation. In a just-in-time environment the desired ending inventories is relatively small. 1. (i.3) Units To Be Produced = Budgeted Unit Sales + Desired Ending Finished Goods . Production Budget Preparing a production budget includes consideration of the desired inventory change as follows: (2.Beginning Finished Goods The desired ending inventory is usually based on the next period’s sales budget.1) Current Period Cash Collections = + Current Period Credit Sales Collected in Current Period (2.

Factors that influence the desired inventory levels include the reliability of the company's suppliers.2. Of course inventories of raw materials (just like finished goods) are kept to a minimum in a JIT environment.5) This calculation is more involved than equation b) appears to indicate because it includes information for two future periods.2. e) Cash Payments for = Current Period Purchases Paid + Prior Period Purchases Paid in Current Period (2. the cost of purchases is easily calculated.7) . Once the quantity to be purchased has been determined. The desired ending materials quantity is normally based on the next period's (month's) materials needed for production and this amount depends on the third period's budgeted unit sales. as well as ordering and carrying costs.2. d) Cost of Material Used = Quantity Need for Production * Budgeted Material Prices The cost of materials used is needed in the cost of goods sold budget.2. Direct Material Budget The direct materials budget includes five separate calculations: a) Quantity of Material = Units to be Produced * Quantity of Material Budgeted per Unit Needed for Production b) Quantity of Material = Quantity of Material Needed for Production + Desired Ending Material To be Purchased .36 3.4) (2.6) c) Budgeted Cost of Material Purchases = Quantity of Material to be Purchased * Budgeted Material Prices This amount is needed to determine cash payments. (2.2.Beginning Material (2. Budgeted material prices are provided by the purchasing department.8) (2.

Estimates are frequently made using a technique referred to as motion and time study.L. Frequently the labor (union) contract provides the source for this information.10) The budgeted rates per hour for direct labor are provided by the human resource department.2. b) Budgeted Direct Labor Cost = D. a) Direct Labor Hours = Units to be Produced * D.37 Direct Material Purchases The information needed to determine budgeted cash payments is provided by accounting. 4.2.L. but motion and time study provides estimates that are very precise. Hours Budgeted per Unit Needed for Production (2. Learning curves provide another quantitative technique that is helpful in establishing labor standards. This involves measuring each movement required to perform a task and then assigning a precise amount of time allowed for these movements. but not postponed. . Many different types of labor may be required with different levels of expertise and experience. Time can be wasted. Hours Needed for Production * Budgeted Rates Per Hour (2. Direct Labor Budget Fewer calculations are needed for direct labor than for direct materials because labor hours cannot be stored in the inventory for future use.9) The amount of direct labor time needed per unit of product is determined by industrial engineers. There are alternative techniques that are less expensive. The cumulative time measurements for the various tasks required to produce a product provide the estimate of a standard time per unit. (accounts payable) and is usually based on past experience.

Ending Inventory Budget The amount for the ending inventory of finished goods is needed to determine cost of goods sold.2. (2. Hours Needed Overhead Costs b) Cash Payments = Budgeted Factory Overhead Cost – Depreciation for Overhead (2. Factory Overhead Budget The factory overhead budget is based on flexible budget calculation. 6. a) Ending Direct Materials = Desired Ending Materials * Budgeted Prices b) Ending Finished Goods = Desired Ending Finished Goods * Budgeted Unit Cost (2. Since some costs. And it is to be noted that although many companies are still using a single production volume based measurement for overhead allocations. these costs must be subtracted from the total overhead costs to determine the appropriate amount.13) ( Cost Of Goods Sold Budget . do not involve cash payments in the current period.L.14) 7. most companies use departmental rates and many companies are using now activity based rates.38 5.12) The calculation for cash payments reflects one of the differences between cash flows and accrual accounting. like depreciation.11) a) Budgeted Factory = Budgeted Fixed Overhead + Budgeted Variable Overhead Rate * D.

15) a) Budgeted Total =Cost of Direct Material Used + Cost of Direct Labor Used + Total Factory Overhead Costs Manufacturing Cost (2. bad debts and income taxes to obtain budgeted net income. These expenses are really important.2. Bad debt expense is based on the expected proportion of uncollectible stated in the information related to cash collections.39 Cost of goods sold is needed for the income statement.2. In a comprehensive practice problem.16) b) Budgeted Cost= Budgeted Total Manufacturing Cost + Beginning Finished Goods . a) Budgeted Gross Profit = Budgeted Sales . Fixed S & A Exp + (Bud Variab Rate as a Prop of Sales * Budg Sales) 9.Budgeted Selling & Administrative Expenses c) Net Income Before Taxes = Operating Income – Interest Expense – Bad Debts Expense (2. These amounts are provided by the finance department.Budgets Cost of Goods Sold (2.18) b) Operating Income = Budgeted Gross Profit .Ending Finished Goods of Goods Sols 8.19) (2. Budgeted Income Statement Preparing the budgeted income statement involves combining the relevant amounts from the sales. cost of goods sold and selling & administrative expense budgets and then subtracting interest. (2.2.2. One method of determining budgeted Cost of Goods Sold involves accumulating the amounts from the previous sub-budgets as follows: (2.20) . the applicable amount for interest expense may need to be calculated from information associated with the cash budget.2. especially for companies which their main activity consists of selling goods or services.2.17) a) Budgeted S&A Expenses =Budg. Selling & Administrative Expense Budget The preparation of the selling and administrative expense budgets is very similar to the approach used for factory overhead.

collectibles increase at a greater rate. Cash budgets are often used to assess whether the entity has sufficient cash to fulfill regular operations and/or whether too much cash is being left in unproductive capacities.2.24) (2. a) Budgeted Cash Available = Beginning Cash Balance + Budgeted Cash Collections b) Budgeted Cash Excess = Budgeted Cash Available – Budgeted Cash Payments c) Ending Cash Balance = Cash Excess + Borrowings – Repayments (2. Often when profits increase. because it allows a company to determine how much credit it can extend to customers before it begins to have liquidity problems.23) The cash budget is an indication of the company's liquidity. making the financing of expansion difficult and the need for short-term credit necessary. they do not necessarily have a high correlation. Since liquidity is of paramount importance.2. and therefore is a very useful tool for effective management. A cash budget is extremely important. a company prepares and revises the cash budget with greater frequency than other . Although profits drive liquidity. especially for small businesses.2. and by investing the excess until needed.40 d) Net Income After Taxes = Net Income Before Taxes – Income Taxes (2. liquidity may increase very little or not at all.2.21) 10. Cash Budget An estimation of the cash inflows and outflows for a business or individual for a specific period of time.22) (2. As a result. Managers optimize cash balances by having adequate cash to meet liquidity needs. or ability to meet its current obligations.

• Dollar values show the financial effect caused by each item for which the actual results are different from those budgeted. sales in excess of budget is positive and costs in excess of budget is negative. • Positive is more than budget and negative is less than budget – therefore a positive variance for a revenue item is favorable whereas a positive variance for a cost item is adverse and is unfavorable.000. Variance analysis will only show the effect of differences. For example. Variances can be presented in one of two ways and it is important to understand which is being used before reading a report: • Positive is good and negative is bad – therefore positive or favorable variances are results that are better than budget and negative or adverse variances are results that are worse than budget.000 comes to $20. The benefits of each method are as follows: • Percentages show the proportionate gap between the actual result and the comparative. a 1% negative variance on projected revenue of $100m comes to $1m. that is. However. slow growth. For example.41 budgets. 2. not their cause. whereas a 20% overspend on an office supply cost budget of $100. action can be taken. or high interest rates. weekly cash budgets are common in an era of tight money. but the second method of variance analysis also has its “customers”. It is the role of management to investigate and respond. Therefore small costs that have large . Most businesses make use of the first method. Once the causes are known. large percentage variances on small items may not matter much. whereas small percentage variances on big items can be critical.3 Variance Analysis Of Budgets Variance or causal factor analysis compares an actual result with a budget to identify the specific causes of difference.

and used just for demonstration. This can be achieved by comparing actual results with what is known as a flexed budget. Therefore revenue and variable costs can be flexed using average “per unit” values (for example. .3. For a realistic comparison the effect of a volume difference needs to be eliminated. Table 2. regardless of any changes in volume. be down as well.2 A flexed budget2 Sales Volume 1 2 Original Budget 100 Flexed Budget 90 Actual 90 Data from the table are arbitrary. All this will be exemplified below.42 percentage variances are ignored. No connection with a real case-study. a more investigative approach can help reveal better reasons. this is misleading because volume was down 10% and therefore variable costs should.3.1 Budget and actual results1 Sales Volume Sales Value Variable Costs Fixed Costs Profit Budget 100 1000 500 200 300 Actual 90 990 495 210 285 Comparing actual with budget indicates that the only area to come in better than budget is variable costs. sales were budgeted at an average $10 per unit and therefore for 90 units the revenue would be $900). However. No connection with a real case-study. Data from the table are arbitrary. by definition. For fixed costs there is no flexing required as they are constants. A flexed budget is a reworked budget based on the original budget assumptions but applied to actual volume. and used just for demonstration. Table 2. Although simple differences can provide some insight why results have not achieved the budget. but large items with costly variances can be targeted for action.

Table 2. a variance statement can be produced to reconcile budgeted profit to actual profit. Although substantial variances may show up.3). Having calculated the flexed budget. Once the variance analysis has been produced it will provide the basis for identifying the appropriate actions to take. they may not be valid if the actual data is incorrect or the budget data is an inappropriate comparison. Examples of these are as follows: • The actual data may contain coding errors where amounts have been entered against the wrong account code such that a budget line is overstated in one area and . (see Table 2.3.43 Sales Value 1000 900 990 Variable Costs 500 450 495 Fixed Costs 200 200 210 Profit 300 250 285 The expected profit from selling 90 units would have been $250 and therefore the result of $285 shows some success.3 Variance Statement Original Budget Profit Sales Volume Variance Sales Price Variance Variable Costs Fixed Costs Actual Profit Original Budget Profit-Flexed Budget Profit Actual Sales Value-Flexed Sales Value Actual Variable Costs-Flexed Variable Costs Actual Fixed Costs-Flexed Fixed Costs 300-50+90-45-10 = 300 (50) 90 (45) (10) 285 This variance statement would be more useful if the individual costs were analyzed in greater detail. Several processes are required before such a conclusion can be drawn. It is not a matter of cutting cost until profit is back on track or increasing expenditure to justify the original budget request. but when it comes to actions the size of the variance dictates the priority.3. The level of detail is a judgment.

although the budget for the year as a whole still remains valid. . A check of the individual transactions posted to a budget code can reveal these errors. • The phasing of the budget may not match the way the actual results are being achieved. • Although a budget may appear under-spent there may be expenditure incurred but not yet recorded in the accounting system for which an accrual would help reconcile the difference.44 equally understated in another. This needs to be translated into why and what is to be done to build on positive variances and improve on negative variances. Calculating the variance in accordance with the methodology described above identifies only what has happened.

This paper wanted to successfully represent that a small business generally engages in budgeting to determine the most efficient and effective strategies for making money and expanding its asset base. Intelligent budgeting incorporates good business judgment in the review and analysis of past trends and data pertinent to the business. mainly concerning on the aspect of budget as a financial planning instrument. and a framework for performance evaluation. Budgeting can help a company use its limited financial and human resources in a manner which best exploit existing business opportunities. the amount of money to be invested. Although budgeting can be time-consuming and costly for small businesses. including an increased awareness of costs. the type and number of employees to hire. In budgeting. improved communication. in a proper and efficient way. and the marketing strategies required. it can also provide a variety of benefits. a company usually devises both long-term and short-term plans to help implement its strategies and to conduct ongoing evaluations of its performance. . This information assists a company in decisions relating to the type of business organization needed. a coordination of efforts toward company goals.45 CONCLUSIONS This paper was aimed at description of budget through focusing on various methods of elaboration and uses. where step-by-step can prepare the master budget. Also this project can be considered as a guide to a successful preparation of budget. given the fact that the several budgeting techniques are presented and choosing one of them the reader can smoothly take the next phase.

13. Barrett M. Lalli William R. Fraser Robin: The Key Features of ABB. Fraser Robin. 1997. Fraser LeRoy B. Bucureşti 1997. 1977. 2000. Bran Paul „Finanţele Întreprinderii”. Bucureşti: Editura Economică. London. 8. 10.Nr. 2000. Bucureşti: Editura Economică. Harvard Business Review. 9. Analiza şi gestiunea financiară”.: Handbook of Budgeting. Lucey Terry: Management Accounting. and Implementation. Brimson Jim. 2. 6. Edgar. “Bugetarea şi elaborarea politicilor”. 4. 4th ed. “Conflicting roles in budgeting for operations” Harvard Business Review. Finanţele întreprinderii. 1995. Trends. Viscione Jerry A. Bistriceanu Gheorghe „Finanţele agenţilor economici”. Bunce Peter. 11. New York. 1996. 2001. Management Accounting Research. Eichorn Christopher J. London : Letts. . Editura Economică. New York: Wiley. 5th ed.46 BIBLIOGRAPHY 1. Woodcock Lionel: Advanced budgeting: A journey to advanced management systems. 1991. 12. Ludmila Cobzari „Organizarea bugetării veniturilor şi cheltuielilor firmei” // „Economie şi Finanţe” 1999 . 7. Rasmussen Nils H. 3. Boston. Boston.. 1984. Bucureşti: Editura FDSC.: Small company budgets: targets are key. Gheorghe Ana „Finanţele şi politicile financiare ale întreprinderii”. 5. Management Accounting. 2003. 2001. Software Selection. Kidlington.5. Stancu Ion „Finanţe: teoria pieţelor financiare. Bucureşti: Editura Economică.: Budgeting: Technology.

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