The annual budgeting process has been criticised

The annual computeing function has been criticisedThe annual calculateing serve up has been criticised as a cumbersome process which occupies considerable precaution sentence concentrating unduly on short term financial control having undesirable effects on motivation of managers emphasising positive organisation structure.IntroductionA budget is a quantitative measurable long term fancy with specified corporate goals set to be achieved within a specific time period. The annual budget is usually divided into sub- casts usually quarterly and is found on an annual strategic business plan. It is explicate by following a process that requires c beful analysis and evaluation of faceal objectives, alternatives, strategic options, decisions and actions and slaying of objectives as well as monitoring of results. The comprehensive nature of the budgeting process thus require intimacy of managers and executives who are obligated for the cooking of actual operations, coordination of activities, communication of plans to responsibility centres motivate managers to achieve budget goals tyrannical activities and evaluating performance. In all of these processes and activities, one notices the contrast roles of budgets that involve planning, motivation and performance evaluation (Drury 2004). Due to these conflicting roles of budgets, in the recent years critics are of the opinion that the annual budget process is merely a waste of resource and a burden to care instead than enabling them to control their management environment. In the following discussion the detective shall discuss the factors concerned and offers some recommendation for improvement of the annual budget process.Discussiona. Management time consumptionConventional annual budget process is a quantified plan prepared and approved to define the course of action and activities to be carried out during a specified time period utilizing certain amount of resources to achieve given objectives (Dru ry 2004). The process deals with projection of activities, contingencies, strategies and interaction of processes within an administration. Budgets are also controls in the planning process to ensure the organization does not deviate from its financial and working(a) goals. These activities and processes require extensive analysis of organisational processes plans for fall guys to be achieved by individual departments and by the overall organization and results expected to be achieved etc. Consequently, one observes that the annual budgeting process is a complex and tedious process that requires top management directives and liaison of lower management and staffs. Not only this but according to Jeremy commit and Robin Fraser (2003) the traditional budget process require four to five months for completion and efforts of 20 to 30 percent of the manager&aposs time.Furthermore, traditional budgeting is based on incremental budgeting whereby expenditures or revenue estimations are b ased the increments on the previous events, and does not necessarily reflect the need of the environment in which the dissipated operates resulting in unachievable targets and undesirable outcomes. To resolve modern day organizations are focussing more on rolling forecasts and driver based budgeting models which are concentrated on participation and usage of drivers that operate the organization (Hunt 2003).b. Short financial controlAnother aspect of the annual budget process is that it is divided and based on quarterly objectives and results. Whether the organization is segmented into profit centres cost centres revenue or investment centres, the radical premise is that each of these centres are responsible for the designated outcome set by the annual budget. The overall outcome is estimated based on the quarterly results. The objective for quarterly results is to enable management to estimate expected results at the end of the year and also to use budgets as financial controls to counteract deviation, if there are all before the situation proliferate out of hand. Yet this very factor not only takes up a lot of management time but it also forces managers to dedicate significant time to target achievements, financial objectives and compliance with the process therein instead of concentrating on management excellence.c. Undesirable effect on manager motivationThe pressure to deliver as Hope and Fraser (2003) note force managers and their teams to concentrate on sales targets customers order of goods whether they want it or not and achieve financial objectives. There is slight and less time for managers to concentrate on team make motivation performance level evaluation or even time for designing effective and productive departmental structure to achieve better results. For this former budgeting process tend to motivate managers to set their objectives to financial objectives and deliverables rather than on working as a team. The managers are thus the gat ekeepers while the team members are forced to become dissociated from the organization&aposs structure.d. tenseness on formal organizational structureGiven the emphasis on extensive and detailed planning at the departmental level, it is imperative that organizations have formal structure so that budgeting process can be integrated into the forecasting and goal achievement activities. Formal organizational structure is also required for building and approving budgets through communication and coordination. Managers are therefore expected to align day to day activities with organizational strategies and budgets in order to achieve the desired objectives. Without a formal organizational structure, it would be difficult for the management to have a control over operational activities and financial consequences therein.ConclusionGiven the above discussion, the researcher deduce that the annual budgeting process is a tedious process that eats up the time of management and lower staff al ike without much productivity. The reason for this low productivity despite well mean budgeting is because of the long process that entails and the nature of the budgeting process. Budgeting from a top down border on is usually an imposition rather than participation. In modern day organization participation of team members, managers and supervisors with the top management is imperative for expeditious operation. Dictated objectives and plans do not help in this regard. For this reason many organizations are changing their approach to budgeting by focussing on operational outcomes and inputs to fixate targets reinforced by incentives rather than outlined targets to be achieved without any motivation. As McGregor indicate in his Theory X/Y human beings are credible to work better if their desired motivation are in place (2005) and they are satisfied. Similarly, effective organizational planning in the form of budgets should be based on firm&aposs ability to suffice to change and more importantly on the satisfaction of those who are responsible for carrying out the plans. Increased participation not only encourages responsibility but also makes accountability easier as individuals feel they are responsible for the operational outcomes. They are not bogged by the imposed accountability (Hunt 2003).ReferencesMcGregor, D. 2005, The Human Side of Enterprise, Annotated Edition. McGraw-Hill.Drury, C., 2004, Management and approach Accounting, London Thompson Business Press, 6th Edition.Hope, J. and Fraser, R. Feb 2003, Trash The Budget. Optimize, Issue 22.Hunt, S. Aug 2003, Budgets Roll With The Times. Optimize, Issue 22.