Steven Bragg - Budgeting: Fourth Edition: A Comprehensive Guide

Copyright 2017 by AccountingTools, Inc. All rights reserved.

Published by AccountingTools, Inc., Centennial, Colorado.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the Publisher. Requests to the Publisher for permission should be addressed to Steven M. Bragg, 6727 E. Fremont Place, Centennial, CO 80112.

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ISBN-13: 978-1-938910-89-0

Printed in the United States of America

It can be extremely difficult to assemble all of the information needed for a creditable corporate budget in a timely manner, and then continue to refer back to it throughout the budget period. Many companies have become so frustrated with the process that they have either given up budgeting or done the reverse and implemented an oppressive, top-down system of adherence to the budget.

This new edition of Budgeting: The Comprehensive Guide addresses all aspects of the budgeting conundrum how to create a budget, whether there are variations on the concept that may work better, and how to operate without any budget at all. In Chapters 1-17, we inspect all parts of a traditional corporate budget, including such areas as the production budget, inventory budget, and master budget, as well as the unique aspects of nonprofit budgeting. In Chapters 18-20, we discuss flexible budgeting and zero-base budgeting, which are variations on the traditional budgeting model. In Chapters 21-22, we cover the concept of operating without a budget. And finally, we address a variety of budget-related systems, such as procedures, reporting, and controls. An appendix contains a sample budget, showing subsidiary budget schedules rolling up into a master budget. A great many topics are covered in the book, including:

What are the advantages and disadvantages of budgeting?

What is the system of budgets?

What are the sources of information for the revenue budget?

When should I use the crewing method to compile the direct labor budget?

When should I use the roll-up method to calculate the direct materials budget?

How do I derive the correct amount of research and development funding?

How does bottleneck analysis impact capital budgeting?

What are the inputs to a budgeted balance sheet?

How do I create a flexible budget?

What are the steps involved in creating a zero-base budget?

What alternative systems are needed to operate without a budget?

What efficiencies can I impose on the budgeting process?

Budgeting: The Comprehensive Guide is designed for both professional accountants and students, since both can benefit from its detailed descriptions of budgeting systems, reports, and controls. As such, it may earn a place on your book shelf as a reference tool for years to come.

Centennial, Colorado
June 2017

Steven Bragg, CPA, has been the chief financial officer or controller of four companies, as well as a consulting manager at Ernst & Young. He received a masters degree in finance from Bentley College, an MBA from Babson College, and a Bachelors degree in Economics from the University of Maine. He has been a two-time president of the Colorado Mountain Club, and is an avid alpine skier, mountain biker, and certified master diver. Mr. Bragg resides in Centennial, Colorado. He has written the following books and courses:

7 Habits of Effective CEOs

7 Habits of Effective CFOs

7 Habits of Effective Controllers

Accountant Ethics [for multiple states]

Accountants Guidebook

Accounting Changes and Error Corrections

Accounting Controls Guidebook

Accounting for Casinos and Gaming

Accounting for Derivatives and Hedges

Accounting for Earnings per Share

Accounting for Inventory

Accounting for Investments

Accounting for Intangible Assets

Accounting for Leases

Accounting for Managers

Accounting for Stock-Based Compensation

Accounting Procedures Guidebook

Agricultural Accounting

Behavioral Ethics

Bookkeeping Guidebook

Budgeting

Business Combinations and Consolidations

Business Insurance Fundamentals

Business Ratios

Business Valuation

Capital Budgeting

CFO Guidebook

Change Management

Closing the Books

Coaching and Mentoring

Constraint Management

Construction Accounting

Corporate Cash Management

Corporate Finance

Cost Accounting (college textbook)

Real Estate Accounting

Records Management

Recruiting and Hiring

Revenue Recognition

Sales and Use Tax Accounting

The MBA Guidebook

Cost Accounting Fundamentals

Cost Management Guidebook

Credit & Collection Guidebook

Developing and Managing Teams

Employee Onboarding

Enterprise Risk Management

Fair Value Accounting

Financial Analysis

Financial Forecasting and Modeling

Fixed Asset Accounting

Foreign Currency Accounting

Fraud Examination

Fraud Schemes

GAAP Guidebook

Governmental Accounting

Health Care Accounting

Hospitality Accounting

How to Run a Meeting

Human Resources Guidebook

IFRS Guidebook

Interpretation of Financial Statements

Inventory Management

Investor Relations Guidebook

Lean Accounting Guidebook

Mergers & Acquisitions

Negotiation

New Controller Guidebook

Nonprofit Accounting

Partnership Accounting

Payables Management

Payroll Management

Project Accounting

Project Management

Public Company Accounting

Purchasing Guidebook

The Soft Close

The Statement of Cash Flows

The Year-End Close

Treasurers Guidebook

Working Capital Management

Steven maintains the accountingtools.com web site, which contains continuing professional education courses, the Accounting Best Practices podcast, and thousands of articles on accounting subjects.

Budgeting is also available as a continuing professional education (CPE) course. You can purchase the course (and many other courses) and take an on-line exam at:

www.accountingtools.com/cpe

A budget is a document that forecasts the financial results and financial position of a business for one or more future periods. At a minimum, a budget contains an estimated income statement that describes anticipated financial results. A more complex budget also contains an estimated balance sheet, which includes the entitys anticipated assets, liabilities, and equity positions at various points in time in the future.