The topic from this week discussed in the assigned chapters that interested me the most is budgeting. According to Brewer, Garrison and Noreen (2022), budgeting presents a quantitative plan for a company’s activities in the nearest future and a controlling tool used to evaluate the company’s progress in attaining specific objectives. While the materials focused more on the practical application of budgeting knowledge in explaining the process of budget preparation, I wanted to learn more about the planning aspect of budgeting.
The development of technologies such as cloud storage and data mining caused a rising trend in the digitalization of business processes. The article by Bergmann, Brück, Knauer, and Schwering (2020) focuses on researching more modern budgeting systems and the connection between the sophistication of data infrastructure systems and the budgeting process. Business intelligence solutions can improve the budgeting process by automatically collecting and analyzing necessary data, increasing the impact of the data component in decision-making (Bergmann et al., 2020). The research results showed that business analytics is more applicable in the planning part of budgeting, including forecasting, coordination, and allocation of resources.
Thus, reading the article provided valuable information about approaches to planning in budgeting and current trends in business accenting. It was interesting to gain more knowledge about the positive influence of business intelligence technologies and data-driven decision-making in planning. However, it was curious to know that companies mainly use data analytics in budgeting for planning and less for evaluating the company’s progress. It can be that modern technologies have not yet developed a way to provide a completely objective assessment of business activities due to the complexity of business goals and missions.
References
Bergmann, M., Brück, C., Knauer, T., & Schwering, A. (2020). Digitization of the budgeting process: determinants of the use of business analytics and its effect on satisfaction with the budgeting process.Journal of Management Control, 31, 25-54. Web.
Brewer, P., Garrison, R., & Noreen, E. (2022). Introduction to Managerial Accounting (9th ed.). McGraw Hill.