Fluent Essays

Write a 2  page essay describing how business decision support systems have evolved over the past several decades as computer and data capabilities have grown.  The rubric for this assignment can be viewed when clicking on the assignment link. http://accounting-financial-tax.com/2009/02/essential-five-steps-on-budgeting-process/ Determining information flow It is universally acknowledged that, any company collects information and data that is important in compiling its budget in two ways. First, it ensures that the process is centralized and that the top management has established the much needed company projections and priorities in what is universally accepted as a top-down approach. Second, the company sees to it that it directs individual work forces coupled with its respective work departments to compile the collected data on their own in what is referred to as the bottom –up approach. Additionally, those budgets plans that are established from the bottom level management to the top management are preferable since it is believed that individual workers know their working environment more than the top management. However, this kind of approach is also very expensive and it needs more time to execute and manage. Deciding on what to measure Deciding on the direction on what to measure to determine the budget direction depends on the company organization or on how the company might want to look like in future. For instance, if COMPNAY is organized such that its electronic products are basically separate profit initiatives such that each product will be in charge of its own distribution, marketing, manufacturing and sales functions separately then it is wise for the company to make its budget along its product lines. Additionally, if the company realizes its profits from its geographical operations, then it is wise for it to budget by its accountability regions. Moreover, if the electronic company is organized such that its operation is based on the traditional norms and values such that there is a separate manufacturing department deals with all goods and services in the region, a separate sales department is in charge of all products in the region or a separate distribution channel that distributes all the products in the region then it is wise for that company to budget along this lines. If this will be the case, then the sales department would be acknowledged as a revenue center whereas the distribution and manufacturing centers will be accepted as Cost centers. Collecting historic data After deciding on how to segment the company operations, it wise to turn the budgetary attention to collecting of historic performance information. In such situations, the first historic performance information area that needs to be assessed is the company’s financial statements, income statements, balance sheets and cash flow statements. Additionally, another potential area to gather information is financial ratios. Moreover, those managed reports that are supplied to the executives of the company throughout the year are also useful tools in collecting specific information relating to product cost trends, sales trends for each product line and divisional performance of each product. a) Collecting information relating to sales Whenever a company executive is required to gather information that revolves around the historic sales data of the company, they are supposed to comprehend its performance based on the following aspects: First is the company product lines such that the company should understand how its electronic products such as …………. Sales have been performing for at least two years but preferably over five years. Second is Regions such that the company should be in a position to break down the performance of the company in terms of sales based on its accountability regions. For example, it should be able to understand how product names have been faring on in COUNTRY. Besides, the company should be able to know how the company sales are faring on in specific markets and countries. Third is a customer such that it is not just effective for the company to comprehend the number of PRODUCT they are selling in COUNTRY, it is very important for it to know who is purchasing its products. For example, what proportion of COMPANY products sales growth is realized because of its collaboration with large business retailers than small-scale independent stores? This type of data is very crucial in determining future company projections. As a result, the company may find this type of data very crucial when adjusting its sales forecasts in that particular region or its overall electronic products sales. b) Collecting of data relating to expenses The company should be able to take into consideration its previous performance in terms of the following costs: First, its direct costs which revolve around any type of information relating to inventory costs, raw materials and labor. Second are the indirect costs which involve research &development costs as well as the general costs of administration. Third are fixed costs which entail many of the indirect costs like depreciation costs, rent and any other costs that make up the G&A expenses. Finally are variable costs, in this case, this type of costs including all those expenses such as raw materials, labor costs and energy as well as taxes that are classified as a variable expense. Making projections Projecting a budget can be a very complicated task depending on the complexity of the company. For example, some organizations depend on incremental budgeting where the company forecasts are directly linked to its previous performances hence making it very easy to prepare. Other companies depend on zero-based budgeting where the company forecasts does not depend on the past company performance hence making it very cghallenging to prepare this type of budget.