How to Achieve New Heights for Industrial Jones Essay

How to Achieve New Heights for Industrial Jones - Essay Example The resources of the organization such as the land and the finance arranged through the overdraft facility can be utilized only through careful budgeting. The targets set in the budget will guide the business operations and help in overcoming problems and analyzing the future. The budget shown here will be very useful for coordination of the various activities such as the production, sales and purchases. The sales budget shown here is the guidance for formulating departmental plans. Estimates have to be done for departmental requirements to achieve the targets. After the budgets for the various activities are formulated and agreed upon , the amounts specified in the budget become the desirable limits of spending. The materials usage, labour utilized, purchases made and the overheads realized will all have to be done with the budgeted figures as the basis. After the budgeted period, the actual expenditures and the budgeted figures will be compared. This comparison will be the basis for judging the performances and fixing the responsibility for deviations. Hence, to make this budget a success the organization has to ensure that the objectives and policies are designed properly. What is going to be the Vision, long term objectives and short term goals of the organization has to be decided. Based on these objectives and goals the policies for the general operations have to be formulated. The budgeted estimates have to communicated to the other members of the organization so that if there is any changes or modifications to be made, the suggestions are incorporated. The other members of the organizations have to acknowledge that the budget is the authority/ target for the activities concerned. For example the usage of labor for the production should be within the limits specified in the budget and likewise for other activities. When an employee has to decide on an issue which in voles flow of money then the budget will be the main guide for his decisions. The employees should understand clearly the importance of the budget in the development of the organization and their job evaluation.