Dilemmas of the budgeting process

Krzysztof Marecki,Maciej Wieloch

doi:10.33119/jmfs.2019.39.5

Abstract

There is a common belief that planning is a key element of effective and efficient management of an enterprise. The budgeting process is a complex task, requiring making many decisions in various areas and taking into account variables dependent also on the specificity of the enterprise. Present- ing both the expected benefits and the disadvantages and costs of a traditional budgeting process provides the basis for further considerations aimed at finding solutions that bring the expected benefits, while minimizing the disadvantages of the solution and adapting them to current expec- tations. There are voices that the traditional budgeting process should be completely abandoned. A postulate appears that budgeting in the form it is currently in use should be abolished. This may sound like a radical proposal, but it would only be the culmination of long-term efforts to trans- form organizations from centralized hierarchies into decentralized networks that allow for flexible adaptation to market conditions.

Highlights

There is a common belief that planning is a key element of effective and efficient management of an enterprise
It can be assumed that the financial planning of market economic entities is related to the process of making future decisions relating to the collection and processing of asset finance streams for its use in operating and investment activities [Marecki, 2003]
As a result of decisions related to financial plans, the budgeting process is introduced, which is the implementation of the plan at the operational, managerial and executive level

Summary

Introduction

There is a common belief that planning is a key element of effective and efficient management of an enterprise. The preparation of the budget for the year usually starts several months before the end of the current year It depends on the complexity of the company’s organizational structure and processes; the more decentralized management of a business entity, the earlier the budgeting process should start to take into account the time needed for information flow and budget negotiations. It can, be assumed that budgeting is the process of preparing, approving, implementing and controlling the budget [Szczypa, 2008, p. These considerations will be followed by the discussion of new tools which can be adopted to the enterprise to bias the problems of the budgeting process

Benefits of the budgeting process

Problems related to the budgeting process

Review of alternatives to traditional budgeting concepts

Findings

Summary