Each successful organization considers its achievements as a result conducting coherent and prepared steps. It recognizes a developed and appropriate plan as a foundation of all business affairs. Planning might be defined as an assessment of an organization’s goals in terms of what resources are required and whether they will be available when they are needed.
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The solution to all issues is impossible without the development of plans for achieving goals. In enterprises, planning is inextricably linked to financial resources. A budget is a document containing the planned indicators of the organization for the near future. Then, this brings all factors to a common denominator, which fosters the implementation of the qualified plan. The planning process is constant and present at all levels and branches of a company. However, when it comes to the creation of the annual financial plan based on in-depth analysis and reasonable propositions, the budgeting process takes place. In this regard, I consider it as an extension of the planning process.
I would define the Budget Committee as a permanent working group created to manage the budget process at the enterprise. It is formed from the heads of financial centers, functional directors, specialists of financial services, and other specialists of the company to organize and manage the budgeting process (Kenton, 2019). Individuals that are to be invited by the Chief Financial Officer at the annual Budget Committee meeting are Marketing and Sales Director, COO, Director for Production, HR director, and Director for Logistics. Each of the mentioned persons is responsible for the reporting and functioning of the vital branches of the company. Based on their reports and propositions, the budget of the firm is to be formed as they have an opportunity to supervise and assess the performance of a branch directly.
In my opinion, the main person of the Budget Committee is its supervisor (usually, a CFO or CEO). Therefore, the successful implementation of the functions assigned to the Committee largely depends on how the company determines the duties, powers, and responsibilities of the supervisor. The example of a task performed by this individual that pertains to the managerial function of “controlling” might be as follows. By his or her decision to control the credibility of reports and proposals, an invitation to a meeting of the committee and specific materials for familiarization can be sent to the general director and experts.
Kenton, W. (2019). Budget committee definition. Web.