Resources and budget are a business’ crucial facilities. Proper management of resources and controlling budget determines the success of any business venture. Resources should be under good management because their mismanagement may cause business failure, as well. Business management accountants should aim at reducing costs when managing resources and budget. The essay describes how to manage the resources and control budget to enhance business success.
Management of Resources
Human resources are the most active resources in a business. The business managers should ensure the employees’ welfare is catered for in an appropriate way. It involves ensuring that workers are treated in a favorable way, which would stimulate them to work better and give a larger output. For instance, in companies, where workers are treated by the mangers in an appropriate way, the latter bring more earnings to the business than the expenses they incur (Tinnirello 2000).
Physical resources are the most important non-human resources in the business because they ensure it functions smoothly. They facilitate a faster performance making the working process easier. For the success of a business, the physical resources that the business owns should have the capability to bring a bigger output compared to their maintenance and initial costs (Hamister 2007).
Physical resources relate closely with the technological ones. Physical resources are prone to becoming obsolete and out-of-date as time goes by. The business managers should ensure that the technological resources are available for updating the physical resources (Phillips 2012). However, there are some technological resources that would make the business bare high expenses.
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Competitors form a sensitive business resource. The competitors ensure that the market is supplied with sufficient and efficient goods and services. Therefore, competition helps to keep high standards of performance. The business should view competitors as a positive challenge and react positively (Tinnirello 2000). The managers have the responsibility to ensure that the business environment is healthy because unheathy competition makes the company spend much to control it.
Legal resources are connected to company’s legal affairs. The latter include the government’s rules on running of the business and the internal business rules (Byrd & Megginson 2013). Government rules are mandatory for a business to follow for it to exist and function. Failure to follow the government’s laws leads to losses because it may close up the business. The internal business rules are set up by the management who govern the internal affairs. For instance, they control the conduct of workers and stipulate the working procedures (Phillips 2012).
Finances are the most crucial resources to any business venture. Generally, they form its economic resources. A company must ensure that it uses its economic resources in an efficient way in order to succeed (Hamister 2007). Economic resources include the working area of the business and the capital. It should also be noted that inappropriate business location would cause business failure because the working area of a company affects the success of the business directly.
Budget control plays a crucial role in the management of economic resources of the business venture (Byrd & Megginson 2013). Budget control should be economical to the business. Input in controlling of budget should be lower compared to the output. Different subdivisions are formed to facilitate budget control. They include revenue centers, expense centers, profit centers and investment centers. They help in simplifying control over budget because each of the centers performs a specific role in budget control (Phillips 2012).
Benefits of Budget Control
Budget control leads to a business’ success because it compels the business management to think about the future (Byrd & Megginson 2013). Therefore, the company will be in a position to approximate the profits and initiate proper projects to increase the profits. In return, the business will succeed. Budgetary control also helps to form the basis for performance appraisal. It is caused by the fact that budget will help in showing the financial status of the business in each step. The business management will take the status as a foundation to improve its performance. As a result, the business will succeed (PPhillips 2012).
Managers of a business should use motivation as a management policy for the resources. For example, providing the working staff with incentives will make workers feel that they are valued by the company. As a result, they will have an urge to work harder to achieve the company’s objectives hence increasing its earnings. Consequently, the business will succeed. Moreover, business managers should ensure that they purchase the necessary physical resources for the company’s operations. Additionally, the physical resources should be kept under strict maintenance through constant servicing to ensure that work flows continuously with no stoppages. Therefore, management of physical resources leads to a better business performance.
The business managers should value competitors and develop a healthy competition for the business success. It is done by relating well with competitors who play a particular role in motivating the business to produce quality goods. Business managers should set up rules that uphold workers conduct in line with the company’s vision. Therefore, the legal resources of a business are vital for its success.
The business managers should locate a company in a strategic location that is economical and convenient. The business should be set in a location that is accessible by free market and at the same time close to the raw materials it needs. Therefore, the location of the business affects its operation. The company should manage the working equipment in a way that maximally benefits the business. Therefore, capital in the business should be managed properly to ensure the company’s success. For an efficient budgetary control, there must be various responsibility centers. This will be an efficient way to ensure that fewer expenses are involved in budgetary control. Planning for future occurrences by the business management will help the company to run smoothly. The expenses and revenues of the business should be controlled.
In conclusion, the business success is highly dependent on how the business manages its resources and controls its budget. The two activities should be aimed at increasing the business income. Business management accountants should apply economic tools in the management of resources and budget control. Therefore, policies for management of resources should use less capital and have high income for the business.