Who should be involved in the development of the budget?
- Why is it important to have management approval of a budget?
- To what extent does the budget serve as a goal and to what extent does the budget serve as a road map for management?
Development of a budget begins at the highest level of management. From that level comes forecasts for sales by product, by region, and by country. Without forecasts, a budget could be somewhat useless.
Once sales forecasts are known, the sales budget is prepared and reviewed by the sales manager and his department. The sales manager will confer with the operations department to confirm that sales projections are attainable in terms of product production.
Then the operations departments will prepare or review their part of the ...
In a 350 word solution, the budgeting process is explained by level of responsibility and in order of development.