We often discuss budgeting in our firm, and I often write about budgeting because it is such an important topic in any company. As a consulting firm, we deal with this issue at almost every client. Let’s rehash some basics… Why is budgeting important? As properly stated by Ron Real (the author of 13 ½ Strategies
Budgeting garners a variety of reactions. Some are annoyed that nobody ever wants to look at them or follow them. Others don’t know how to read them – so they just ignore them. Then there are some that just follow the mantra – everything is going to be alright. But we have seen some budgeting
Ron Rael, author of 13 ½ Strategic Ways of Winning the Budgeting Wars, once said that, “To achieve success in anything, you need two ingredients: a target to aim for and a way to measure your progress towards it.” Budgeting is all about achieving success in business. When you improve the budget process, you are
Let’s go back to when you were a child. You looked up at a tree and thought… If money is made from paper and paper comes from tress, surely, I can make money grow from trees! Or maybe, you asked your parents for something extraordinarily expensive and they responded with “money doesn’t grow on trees”.
Do you need to take an umbrella to work today? Without a trusty weather app or friendly meteorologist, it would be difficult to know the answer. Fortunately, you probably have one of these tools to help you make an informed decision. The CFO/Controller is the meteorologist for the business. It’s your job to help the company decide when, and if,
Unfortunately, companies of all sizes can become victims of fraud. In fact, a study on fraud published by accounting firm KPMG International found “a very large increase in cases involving the exploitation of weak internal controls by fraudsters up from 49 percent in 2007 to 74 percent in 2011.” Thus, internal controls are a first
Fiscal vs Monetary Policy What is Fiscal Policy? Fiscal policy is essentially how the government decides to collect and spend money to impact the economy. This is studied in Macroeconomics to better understand the relationship between the economy and governmental influence. The study of fiscal policy is useful in speculating the reaction to changes in
What is a Zero Based Budget? A zero-based budget (ZBB) requires all expenses to be justified each period. Essentially, a zero based budget is when you create a budget from scratch each period. Each period, reevaluate and justify all expenses in terms of the company’s overall strategic objectives. Distinguish the zero-based budget from the traditional budget.
See Also: Direct Labor Variance Formulas Direct Material Variance Formulas Asset Market Value versus Asset Book Value Accounting Income vs Economic Income ProForma Financial Statements Variance Analysis Variance analysis measures the differences between expected results and actual results of a production process or other business activity. Measuring and examining variances can help management contain and
See Also: Standard Costing Example Process Costing Activity Based Costing vs Traditional Costing Absorption vs Variable Costing Implementing Activity Based Costing Cost Driver Budgeting 101: Creating Successful Budgets Analyzing Your Return on Investment (ROI) Product Pricing Strategies Standard Costing System In accounting, a standard costing system is a tool for planning budgets, managing and controlling
Standard Costs Definition Standard cost accounting is a goal or budget costs that is associated with variable costs. They are also used to measure the cost that management believes that it will incur over a period. Standard Costing Explained In short, standard costing takes the direct labor, direct materials, and manufacturing overhead, and estimates the
See Also: Marketing Mix (4 P’s of Marketing) Marketing Your Company using WikiCFO Compensation Plan Strategic Planning Process Action Plan Marketing Plan Definition The marketing plan definition is the plan to cultivate and harvest demand for the products of a business, and it is part of the business plan. A marketing plan outlines answers to