Describe the key stages of budgetary process, (b) Critically evaluate, Essay

Describe the key stages of budgetary process, (b) Critically evaluate, referring to the research findings the social significance of budgeting in modern organisations - Essay Example Budgeting process can be done for several reasons in an organization like planning, communication, coordination, motivation, performance evaluation and controlling process. Budgets can be of various types like short term budgets which are done for a month, a quarter or for a year. Operational control budgets are mainly done for a specific operation and the duration of this type of budget is a week or maximum a month. The most long term budget is known as capital budget which is done by the company for a period of more than one year and it can be extended to ten years and it determines that whether a company should proceed for a long term investment or not . Budgets can also be differentiated as sales budget which estimates the amount of future sales revenue and create a target for sales, production budget which estimates the number of output that should be produced to meet they sales target. Marketing budgets help to estimate the amount which is necessary for advertising and promotio nal activities to place the product in the market (Collier, 2002, pp. 207-208). Budgets are mainly based on the standard costing method for a certain level of production and sales. It should be prepared by an experienced accountant. A budget should describe the objective of the budget and the steps that are involved in the process of budget. There are several steps involved in the budgeting process which area s follows- Communication about the guidelines and policies with those people who making the budget is very important because e many decisions that may affect the budget year have been considered previously in the long term planning process which is the starting point for the annual budget. Thus the top level managers need to communicate the effect of the policy to the people who are responsible for the preparation of the budget of current year. The effect of the policy