![]() ![]() However, some operating personnel and lower-level employees may disagree with top management’s estimates in the budget. It takes less time to create since there are fewer employees involved. Authoritative budgetingĪlso known as top-down budgeting, this budget involvement strategy only includes top management in the budgeting process, where operating personnel and lower-level employees have little to no say in the budget. Alternatively, participatory budgeting applies if the owner delegates decision-making to managers. There are two kinds of budget involvement-for small businesses, authoritative budgeting is suitable if the small business owner is heavily involved in daily operations. Small businesses must consider what kind of involvement is needed during the budgeting process, given that budgets can be used to measure the performance of departments and managers. You can modify the phases depending on small business needs. This phase runs intermittently during the year, such as monthly, quarterly, or semiannually, especially during performance evaluation and review.Īs a small business, you need not be particular about the phases.
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