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Budgeting And Evaluating The Performance Of British Airways

827 Words4 Pages

This report will be based on British Airways and I would be illustrating the use of budgets of their financial controls and evaluating the importance of why costs need to be controlled to budget. To conclude, I would clarify how the running resources and controlling the budget can improve on the performance of B.A. Furthermore, I would evaluate the issues and problems recognised from unmonitored costs and budgets. Pass: A budget is when a business or individual have a certain amount of money to spend. Relating this to B.A, this organisation has a budget as it is a process of preparing financial reports which are expected in the present and future. Budgeting sets a guideline for how much money this business can spend on their physical resources …show more content…

This budget is mainly used in large corporations such as B.A to keep all the employees and managers united. Operating budget is also another type of budget and this is breakdown of anticipated income and costs over a long time of period. This type of budget combines with accounts such as sales, production, costs for material; labour and industrial costs and management expenditures. This type of budget is formed on a different basis such as weekly, monthly and yearly and businesses compare these financial reports over a selected time to see whether the business is overspending or saving on their …show more content…

Budgeting in this business helps as it can show how much money is coming in and out of the organisation, such as the CEO would be aware of how much they would need to spend on each department and how much would return as they would not wish to overspend and lose the money. Also using budgeting, it helps B.A identify inefficient expenditures and they can adapt quickly leading them to achieve their financial goals. This business uses budgets so it can set financial targets, to motivate employees and to assign responsibilities, to improve proficiency, to provide and turn strategic direction and objectives into practical reality, to monitor business performance and to control income and expenditure so the business does not overspend and to ensure there is enough capital set aside for emergencies. To conclude, this business uses budgeting in order to create an action plan for their business which can identify current available capital and estimates costs and anticipates

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