2) Write a 750 word brief report integrating aspects of the module with at least three external resource to support

your position about whether you agree or disagree to the following statement. Budgeting is the key component in management short and long term planning.

Budgeting is define as a key management tool for planning, monitoring, and controlling the finances of a project or organization.It estimates the revenue and expenses for the duration of the project. To determine whether budgeting is indeed the key component in management short and long term planning this can be assess through analysing different sources that supports the statement. Based on the first source the world bank organization website budgeting is done for various purpose. Firstly by monitoring the income and expenditures over one full period. Monitoring the income and expenditures is a relatively essential step to be taken because in flow of money itself does not promise profit if the expenses of the company or the project done is not monitored and control. The success of one project depends on how much money it makes and how much profit and losses it incur. By monitoring this two aspect this ensures that the project does not suffer a lose.

Secondly, it helps to deduce whether programs and goals need alterations. Programs and goals of the project might be too optimistic especially with the volatile market in today's economy. Inflation and economic downturn have to be taken into account as to whether the programs are able to be carried out smoothly and the goals are able to be met. By determining whether programs and goals need alterations, changes could be made particularly if the current economic condition is not promising.

Thirdly, forecasting income and expenses for the project, including the timing and the availability of income such as additional grant funds. By predicting the expenses that will incur for the project to start, research can be done to find the financial loans and grants available. Early research is important especially to seize the deal with the bank. Take for instance, the process to obtain loans and grants from the bank is usually a long and tedious

one. Relevant documents and references have to be submitted in order for the bank to take into consideration whether to lend the company that particular sum of money. With lack of research and late submission and application of the loans the finance needed to start the project will be affected. This in return will result in the project being restrain.

On the other hand, the second source believes on the features portrayed in budgeting that is necessarily for the long and short-term management planning.

Policies which is one of the features, is needed to meet the goal of the company. The use of policies place control to ensure rules are complied and in the event that conflict arises these policies would be a guideline to cease the conflict. Next is the data which are expressed in monetary terms. These predicted datas are an important tool that foresee the income and expenses incurred during and after the project. This enable the financial position of the project to be control to safeguard the profitability of the project. Lastly, period relates to the future period of time. This applies to both short term and long term budgeting where the budget is done so as to keep up with the future and not having an obsolete information that would no longer be relevant.

Besides that, the third source which is obtain from Civicus Organisation website explained three different working budget that a company would take in order to cope with the problem that might arise during the project duration. First, survival budget is the least needed in order for the company to survive. Survival budget might not seem as important at the beginning of the project where loans are still freshly receive and the project have yet to run low on money to cover for expenditure incur. This particular budget however could be useful for the later or mid part of the project where more problems will start to arise and actions have to be taken to ensure the project does not fail. Also, guaranteed budget is an revenue assurance during the planning of the budget. This are pledge from investors that assured the project will go smoothly with the money that they provide. However, an inevitable problem might arise during the later part of the project and it might be wise to take survival budget into consideration. Not forgetting, optimal budget. This covers the additional money raise that

reflects positively on the project's profit.

To conclude,I I agree that budgeting is the component in management short and long term planning and the three sources above describe how budgeting helps during the planning and how its predictions are informed guesses. Also, it provides different working budget that enable the company to cope with problems and crisis that might put the project in loss.

References : First Source Retrieved Jun 4, 2012 from http://siteresources.worldbank.org/INTBELARUS/Resources/Budgeting.pdf Second Source Dyson John. Accounting for Non-accounting Students. (8th ed.).Pearson Prentice Hall. Third Source Retrived 4 June, 2012 from https://www.civicus.org/new/media/Budgeting.pdf