看向世界SpotWorld: (Management Accounting) Explain the advantages and disadvantages of different types of planning tools used for budgetary control.

To help manager to determine that if any excessive idle cash or have any cash shortage that is expected during the time and help managers to plan with the information that are provided.
Allow people within an organization to plan and think about the future planning in order to achieve the target and objective.
Allow an organization to quickly identify their potential deficits. This means that when the company operating off of a cash budget, a company can quickly determine whether have enough cash to meet its objectives.

Consuming time to create a budget especially for the environment that is very poorly-organized where reiteration may be required and will require a lot of time. Time requirement will be large if there are participative budgeting processes in place such as systems that include a large number of employees.
Cause distortion by cash budget. The impact of non-financial factors can directly influence the final decision. This means that the cash budget is very easy to manipulate. The main problem is that the cash budget fully depends on the estimate.
If the department cannot meet the budget target, at the end of the time, the department will be blamed by another department that provides service because not provide the necessary support. So, this will bring conflicts in an organization.

Revenues and expenses are covered through the operating budget on a day-to-day basis business of an organization.
Managers can compare the results that ongoing to budget throughout the year. So that the organization can do some planning and adjust for the variations in the revenue.
Operating budgets are normally broken down into smaller part of the reporting period such as in weekly or monthly basis so that the manager can look at the report with more easily.
Improve the organization’s overall efficiency and also help to guide the staff in an organization to have an efficiency and better planning in order to perform the business function apart from making them accountable.

Expenses will be allocated. The budget may regulate that some of the overhead cost will be allocated to different departments and thus the managers of those departments will take issues with the allocation methods that are used.
Actual cost that are spend will not match with the allocation that is made. This will cause a lot of time will be consumed to find out the problems.
Operating budget is a short-term budget and not focus on the long-term objectives so this will cause the organization cannot achieve its target and objectives in a short-term period.

Helps in achieving the long-term target and goal of the organization. Because the resources of an organization are controlled and channelized for the purpose of optimizing the profit.
As a continuous improvement of an organization. Because organization prepare the budget every year and as a tool of analytics. So, the variances can be identified for better results on a continuous basis.
As motivation tool which can help employees to compare the budgeted performance with actual performance. It also helps staff to get job satisfaction and contribute to the growth of the business.

It is difficult to modify and it is difficult to update the information. Because it requires a lot of steps in the entire budget if want to ass or delete. This is because it also includes lengthy descriptions and charts.
Achievement of the target and having practical difficulty in achieving the same are forced by the divisional staff. This leads the organization to higher expense estimates and low revenue estimates.

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