Internal Memo: Understanding the Budgeting Process

Internal Memo
Name
University
Course
Instructor
Due Date
Internal Memo
Subject: Understanding the Budgeting Process
Dear [Coworker's Name],
I am writing to provide you with an overview of the budgeting process and how it relates to managerial decision-making. As you know, budgeting is a critical process for any organization, as it helps in planning, allocating resources, and achieving goals.
Budgeting involves forecasting and planning for future expenses and revenues over a specific period. The budgeting process includes gathering financial data, analyzing historical data, and making assumptions about future trends in financial spending within a company (Becker et al., 2016). To this end, the process considers the current status of a company and the desired state. In most cases, there is a budgeting committee tasked with developing a comprehensive budget based on the anticipated volume of sales and services that serves to create a guideline for the top management within an organization (Weygandt, Kimmel, & Aly, 2020). The prepared budget guidelines are passed down to various managerial levels so that managers can budget for items under their control. Managers use budget guidelines to make strategic decisions, such as resource allocation, pricing, and investment decisions. For instance, a sal...