PREFACE Although much has been written of budgetary control as applied to particular phases of a business, this is the first attempt, so far as the author is aware, to present the subject as a whole, and cover the entire budgetary program. It is to be regarded as an effort to state clearly the problems involved, rather than to offer full solutions. It is hoped that the discussion will stimulate thought, and constructive criticism will be gladly received. One obvious difficulty has been the problem of what to include and what to omit. The budgetary procedure involves administrative policies on the one hand, and administrative routine on the other. The discussion might easily cover the whole field of business administration, ranging over a wide variety of topics about which no one individual can be expected to have expert knowledge. In the present work, however, the reader is addressed throughout, not as a technical expert, but rather as a student of the broad problem of administration. The advertising man, for example, may be aided in handling his own problems through understanding the method of applying budgetary control to the operations of all other departments of the business, as explained in the other chapters of the book. So with the other departmental executives; it is hoped that each of them will be helped by a comprehensive picture of the problem as a whole. The discussion has been kept sufficiently elementary, it is believed, to be easily understandable by those who are not experts on the technical subjects discussed. With this thought in mind, there has been no effort to prescribe an arbitrary procedure. In some cases, assumptions have been made and definite procedures discussed, but 429841 only for the purpose of making the treatment concrete; the definite procedures given are intended to be suggestive only. Similarly, the various forms given are merely indicative. All of them have been used by the author at some time in his professional practice, but he by no means regards them as standard forms. He has found it necessary to design forms to meet each particular case. Finally, no attempt has been made to discuss in detail the many problems which may arise in the installation and operation of budgetary control. To do so would be to make the volume less useful to those for whom it is primarily intended. It is thought that the reader who has a comprehensive picture of the entire problem will be able to make his own applications and to work out the special adjustments required for his own situation. The text is based primarily on the rather wide experience of the author in professional work, but material assistance has been received from various business men, accountants, and instructors. Particular acknowledgment is due to the following: Mr. W. V. Lindblom, executive in charge of the budgetary procedure of the Walworth Manufacturing Company, and Mr. Albert S. Keister, Lecturer on Business Finance, University of Chicago, who have read all the manuscript and given many useful suggestions; Mr. N. L. McCully, executive in charge of the budgetary procedure of the Lewis Manufacturing Company, who prepared the chart on budgetary procedure given in Chapter XXIII; and Mr. George E. Frazer, C.P.A., the author's partner, to whose counsel and assistance the author is especially indebted. Chicago, Illinois, JAMES O. MCKINSEY CONTENTS THE NEED FOR BUDGETARY CONTROL PRELIMINARY STEPS IN INSTALLATION. ORGANIZATION FOR BUDGETARY CONTROL VI THE SALES BUDGET (Continued) - XX THE FINANCIAL BUDGET (Continued) XXI THE ESTIMATED BALANCE SHEET |