The budget process

Budgeting in Scaters is a collective process in which operating units (functions) prepare their plans in conformity with Scaters goals. Each unit plan is intended to contribute to the achievement of the Scaters goals. Unit managers prepare forecasts of sales, operating costs, overhead costs, and capital requirements. They calculate operating profits and returns on the investment they intend to use. The (master) budget itself is the projection of these values for the next year. As part of this process, each unit presents its plans and budget to the MD and management team (budget committee) and may, thereafter, make whatever changes result from instructions from or negotiations with the budget committee. Approved budgets then become the road-map for operations in the coming year.

Once all activities have been completed you should print the master budget and explain it at the budget meeting if one is set. If there is no scheduled meeting you should use the master budget as a context to generating and evaluating strategic investment opportunities. Such opportunities may be presented to the MD. 

Running in parallel with the master budget process is the capital investment process. This is outlined within the Figure