Respond to two or more of your colleagues’ posts in one or more of the following ways: (Respond to each Colleague 150 words or more)
Ask a clarifying question about how strategic planning, budgeting, and forecasting processes can impact the decision making of the organization your colleague described.
Provide an insight you gained from your colleague’s analysis of how they could utilize a budget as a manager or future manager.
Return to this Discussion in a few days to read the responses to your initial posting. Note what you have learned or any insights you have gained as a result of the comments your colleagues made.
1st Colleague to Respond to:
I currently work as an Office Coordinator at Hillside, Inc. which is a children’s psychiatric residential treatment impatient hospital that focuses on mental health services for adolescents. We service clients ages 11-21. Clients who are in between the ages of 18-21, are required to still be in high school or working towards a high school diploma and in the custody of their parents/guardian, who can make medical decisions on their behalf. We also provide a variety of additional outpatient services such as intensive outpatient day program for ages 13-17. Clients in this program receive day treatment, specifically for clients who have stepped down from residential treatment and need a lower level of care for an additional 6 weeks of service. we also provide community base assistance and in-home services, where out therapist come into you home or visit you in the community to provide mental health services.
Our organization was founded in 1888 and is one of Atlanta’s oldest non-profit organizations. The home, which was to become Hillside, was initially named Home for the Friendless. As other agencies were formed to care for adults, the Home for the Friendless became exclusively a shelter for school-aged children. In the 1920’s the home made a number of improvements necessary to bring the program into compliance with a new set of child welfare standards, which were developing nationally.
During this time, the Kiwanis Club became interested in the home and made financial contributions to help bring the home up to the national standards and to help enhance the life experiences of the children in care. In 1926, Kiwanis Club of Atlanta donated additional funds to help purchase 8 acres of land where the facility currently resides in midtown to help build additional Hillside cottages to service more children who need care. Today Hillside operates as a private, nonprofit organization offering a continuum of services for children and adolescents struggling with emotional and behavioral issues (hside.org).
As a non-profit organization, we are funded through many sources such as company sponsorships which is a great exposure opportunity for your company to build brand equity, monetary donations, donation of securities, corporate giving which can include product donation, percentage of sales and/or employee gift matching campaign as well as planned giving where many individuals provide for the long-term support of Hillside through a Will bequest, trust, charitable gift annuity, life insurance policy, or retirement account that will best benefit you and the organization. All these can be claimed as an income tax deduction.
With our funding being provided by the many resources I mentioned, it is essential for our organization to develop strong business planning to ensure funding is best utilize where it is needed. We currently have a Strategy Team that meets quarterly with specific leadership team and Board members to discuss our organizations strategic planning, budgeting and forecasting in order to help with decision making processes. Our CFO creates a Budget and Board Presentation for these quarterly meetings which outlines the future business plan of the organizatio. A budget is a prediction of the organization’s expenses and revenues to occur during a timeframe (Franklin, Graybeal & Cooper, 2019). This presentation has included further work to allocate central administration costs accurately to all programs, but much of the costs have been allocated to the Residential Program. Central allocations provide more accurate program revenue results and help identify program strengths and weaknesses and allow for better decision-making regarding program growth or reduction. Program workgroups are being created to evaluate each program to identify plans for revenue growth and/or maximization or program change while considering new service opportunities to meet needs (Acker 2022). Forecasting is the prediction of future activities or trends utilizing historical data (Franklin, Graybeal & Cooper, 2019). Our organization conducts quarterly surveys for the employees and our clients on future events they would like to see happen on and off campus, volunteer opportunities and even suggestions of different food options for our dining hall that provides all meals for both staff and clients. Last month, we had architects visit our campus to interview a diverse employee group to gather information on the current building uses, what is working and what is needed during Phase I of the project. Phase II of the project will include a visioning work session with the architects and a landscape architect to address vision, goals, and requirements for the campus. This phase will result in two to three conceptual designs and a visioning statement and goals list. Phase III is the creation of the master plan and project list with up to three renderings of key building improvements or additions (Acker 2022).
As a future manager within a non-profit organization, utilizing a budget to measure performance will allow a more overview of the funding we receive and how it is put to use for the benefit of the services we provide to children, their families and the staff within our organization. The opinions and input of both staff and our clients are important in how we effectively use our resources to expand and improve the services we offer. This will help me to better assist our leadership team in determining how to best use our funding based on budget.
References
Acker, E. (2022, June 21). President’s Report. Franklin, M., Graybeal, P., & Cooper, D. (2019). Principles of accounting, Volume 2: Managerial accounting. Open Stax. hside.org
2nd Colleague to Respond to:
In the face of the changing business environment; strategic planning, budgeting, and forecasting help businesses understand how the ongoing activities of their business contribute to delivering their long-term strategies. Financial planning and forecasting are used to determine the allocated resources for availing strategic objectives and action plans to achieve desired goals. Companies that can update plans and forecasts quickly are in a better position to take advantage of opportunities and respond to threats (Stretch, 2009). Budgeting, forecasting, and variance analysis are management accounting tools that can help organizations gain a more in depth understanding of the industry in which they operate.
About LDCosta Loans and Financial Management Limited
LDCosta Loans and financial management limited (hereafter called LDCosta) was founded in 2002 in The United States of America and open its services to Jamaica in 2011. LDCosta is a micro-financial and financial management organization that operate on a profit basis and rely heavily on costumer businesses to remain operational and profitable. The organization give personal and business loans as well as provide financial management services to small and medium enterprises. Over the years, the company has earned a reputation that has a unique combination of quality, value, trust, and reliability. The company believes that employees will always give a good impression while serving the customers and believes in the satisfaction of the employee. I served LDCosta in the capacity as General Manager during my tenure.
The Impact of Strategic Planning, Budgeting, And Forecasting on Decision Making At LDCosta
LDCosta did not achieve its long-term financial performance for five consecutive years, whilst operating within the various environmental constraints. The failure occurred due to lack of strategic planning, poor budgeting, poor forecasting, ineffective communication and lack of monitoring of the various performance measures. All of which are core processes in managing the organization’s financial and operational performance and play a critical role in influencing and shaping the implementation of its strategy. In addition, the failure of the board enagement and transformational leadership impacted LDCosta achievements. The incorporation of sustainability into the organization’s strategy, and subsequently into the budgeting and forecasting processes, resulted in missed opportunities to improve decision making and risk management, enhance innovation and stakeholder engagement, and align business performance with long term values.
The Utilization A Budget to Measure Performance and To Assist In Effective Decision Making
CIMA (2008), states that the main purposes of budgeting as it relates to planning and control and supporting the achievement of strategic plans are as follows: translating the long-term plan into an annual work programme, coordinating the various departments of the organization to ensure they work in harmony. As a manager, utilizing a budget to guide operations is crucial. It will aid to forecast income and expenditure and identify cash flow problems quickly. It will also be the GPS for performance and success as it offers detailed information about expected outcomes to guide decisions towards the organization strategic goals and objectives. Utilizing a budget will aid the mitigation of potential risk, that may impact performance measures. In addition, budget utilization as a manager aids the continuous improvement process once monitoring of the same is effective.
References:
CIMA (Chartered Institute of Management Accountants), 2004. A report on the Better Budgeting Forum from CIMA and ICAEW. London, 24 May 2004, London: Silverdart LTD. CIMA, (2008a). Standard Costing & Variance Analysis [pdf] Available at: CIMA, 2008b. Budgeting-Topic gateway series No.27 [pdf]. http://www.cimaglobal.com
Ostaev, G.Y., Kondratyev, D.V., Nechaev, B.P. and Romanova, A.N., 2020. Foresight research in management accounting: scenario forecasting and a comprehensive system of expert assessment methods in agricultural holdings. Amazonia Investiga, 9(29), pp.188-203.
Stretch, J. (2009). Rolling out a new era in strategic planning. The WITS Business School Journal, 2 (18), 89-90.
