{"id":5889,"date":"2025-10-10T02:48:53","date_gmt":"2025-10-10T09:48:53","guid":{"rendered":"https:\/\/ketoan.man.net.vn\/?p=5889"},"modified":"2025-12-16T21:42:35","modified_gmt":"2025-12-17T04:42:35","slug":"du-toan-ngan-sach","status":"publish","type":"post","link":"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/","title":{"rendered":"Budget forecasting and effective application methods"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">In an increasingly competitive business environment, effective financial management is key to achieving strategic goals. Budgeting is not just a financial planning tool, but the heart of the system. <\/span><a href=\"https:\/\/ketoan.man.net.vn\/en\/ke-toan-quan-tri\/\"><span style=\"font-weight: 400;\">Management accounting<\/span><\/a><span style=\"font-weight: 400;\"> Management accounting helps businesses control operations and maximize efficiency.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This article delves into the concept, role, methods, and key considerations for businesses to accurately prepare budget forecasts.<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_88 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Index<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewbox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewbox=\"0 0 24 24\" version=\"1.2\" baseprofile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#The_nao_la_du_toan_ngan_sach_trong_ke_toan_quan_tri\" >What is budget forecasting in management accounting?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Loi_ich_vuot_troi_cua_hoat_dong_du_toan_ngan_sach\" >The outstanding benefits of budget forecasting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Dac_diem_cot_loi_cua_hoat_dong_du_toan_ngan_sach\" >The core characteristics of budget forecasting activities.<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Tinh_toan_dien_va_pho_quat\" >Area and universal calculations<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Tinh_chi_tiet_Nguon_hoa_von_va_Nguon_luc\" >Detailed breakdown of Break-Even Sources and Resources<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Yeu_cau_lap_du_toan_ngan_sach_chi_tiet_cho_cac_Don_vi_trien_khai\" >Request for detailed budget estimates for the implementing units.<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Cac_muc_do_chinh_xac_cua_du_toan_ngan_sach_trong_ke_toan_quan_tri\" >Levels of accuracy of budget forecasts in management accounting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Phan_loai_du_toan_ngan_sach\" >Classification of budget estimates<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Theo_thoi_gian_du_toan\" >According to the estimated time<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Theo_moi_quan_he_va_muc_do_hoat_dong\" >Based on the relationship and level of activity<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Theo_noi_dung_Kinh_te_hoac_Chuc_nang\" >According to Economic or Functional content<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Cac_phuong_phap_lap_du_toan_ngan_sach\" >Budgeting methods<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Lap_du_toan_tu_tren_xuong\" >Top-down budgeting\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Lap_du_toan_tu_duoi_len_tren\" >Prepare the budget from the bottom up.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Du_toan_Thoa_thuan_hoac_du_toan_phoi_hop\" >Estimated Agreement or Coordinated Estimate<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Du_toan_ngan_sach_theo_ky\" >Budget estimates by period<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Nhung_luu_y_quan_trong_khi_lap_du_toan_ngan_sach\" >Important considerations when preparing a budget.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Nguyen_nhan_dan_den_sai_lech_so_voi_du_toan_ngan_sach\" >Reasons for deviations from budget estimates<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Hien_tuong_Duong_cong_Kinh_nghiem\" >The Experience Curve Phenomenon<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Muc_tieu_khong_kha_thi\" >The goal is not achievable.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Khong_du_tinh_duoc_su_thay_doi_gia_cua_dau_vao\" >The change in input prices could not be predicted.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Cac_nguyen_nhan_khac\" >Other causes<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Ket_luan\" >Conclude<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/ketoan.man.net.vn\/en\/du-toan-ngan-sach\/#Thong_tin_lien_he_MAN_%E2%80%93_Master_Accountant_Network\" >Contact information MAN \u2013 Master Accountant Network<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"The_nao_la_du_toan_ngan_sach_trong_ke_toan_quan_tri\"><\/span><b>What is budget forecasting in management accounting?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Budgeting is the process of detailed, systematic financial and operational planning, expressed in quantitative terms (monetary or physical), to describe the plan for mobilizing and using resources to achieve strategic objectives over a defined period (usually a fiscal year).<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Within the framework of management accounting, budget forecasting plays a dual role:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Planning Tool: Transforming long-term strategies into measurable short-term operational goals.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Control Tools: Establish benchmarks (budgets) to compare against actual results, thereby evaluating performance and management accountability.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">A budget is not a report of what has already happened, but rather a commitment to what the organization expects to achieve and spend in the future, based on business assumptions and forecasts.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Loi_ich_vuot_troi_cua_hoat_dong_du_toan_ngan_sach\"><\/span><b>The outstanding benefits of budget forecasting<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<figure id=\"attachment_6945\" aria-describedby=\"caption-attachment-6945\" style=\"width: 1200px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-6945\" src=\"https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Loi-ich-vuot-troi-cua-hoat-dong-du-toan-ngan-sach.jpg\" alt=\"L\u1ee3i \u00edch v\u01b0\u1ee3t tr\u1ed9i c\u1ee7a ho\u1ea1t \u0111\u1ed9ng d\u1ef1 to\u00e1n ng\u00e2n s\u00e1ch\" width=\"1200\" height=\"800\" srcset=\"https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Loi-ich-vuot-troi-cua-hoat-dong-du-toan-ngan-sach.jpg 1200w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Loi-ich-vuot-troi-cua-hoat-dong-du-toan-ngan-sach-300x200.jpg 300w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Loi-ich-vuot-troi-cua-hoat-dong-du-toan-ngan-sach-1024x683.jpg 1024w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Loi-ich-vuot-troi-cua-hoat-dong-du-toan-ngan-sach-768x512.jpg 768w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Loi-ich-vuot-troi-cua-hoat-dong-du-toan-ngan-sach-18x12.jpg 18w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><figcaption id=\"caption-attachment-6945\" class=\"wp-caption-text\">The outstanding benefits of budget forecasting<\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">Budgeting activities provide indispensable strategic value for business management and operations:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Promoting Collaboration and Coordination: Consolidate plans from different departments (Production, Marketing, Human Resources, etc.) into a common goal, ensuring all departments are aligned towards the company&#039;s overall objective.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Performance and Accountability Assessment Tool: Budgets provide an objective benchmark for comparing actual costs and revenues. This allows managers to accurately assess the operational efficiency of departments and individuals.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Proactive risk management: By forecasting income and expenses, organizations can identify financial weaknesses, capital shortfalls, or potential investment opportunities early on, and take timely corrective measures.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Optimal Resource Allocation: Budgeting forces managers to think carefully about supply and demand, helping to optimize the use of scarce resources such as capital, time, and human resources.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The strategic benefits of budgeting can only be achieved when businesses thoroughly understand the nature and operation of this tool. Therefore, to implement budgeting effectively and in line with management objectives, a full understanding of the core characteristics of budgeting is a fundamental requirement.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Dac_diem_cot_loi_cua_hoat_dong_du_toan_ngan_sach\"><\/span><b>The core characteristics of budget forecasting activities.<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Budgeting in management accounting has fundamental characteristics that reflect its nature as a management tool:<\/span><\/p>\n<h4><span class=\"ez-toc-section\" id=\"Tinh_toan_dien_va_pho_quat\"><\/span><b>Area and universal calculations<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">Budgeting typically encompasses all of an organization&#039;s operations. Budgeting is not just a cash forecast, but a comprehensive, interconnected system of budgeting, including:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Operating forecast (Revenue, Production, Costs).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Capital estimate (Investment in fixed assets).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Financial projections (Balance sheet, Projected cash flow statement).<\/span><\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Tinh_chi_tiet_Nguon_hoa_von_va_Nguon_luc\"><\/span><b>Detailed breakdown of Break-Even Sources and Resources<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">The budget estimate requires a detailed breakdown of the projected funding sources, including both internal and external sources.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Internal financing sources: Retained earnings, depreciation.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">External funding sources (Public or project funding): In public projects, the budget must detail the funding sources from local governments, issuing agencies, or specific grants. This helps ensure transparency and compliance with funding regulations.<\/span><\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Yeu_cau_lap_du_toan_ngan_sach_chi_tiet_cho_cac_Don_vi_trien_khai\"><\/span><b>Request for detailed budget estimates for the implementing units.<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">In a project environment or when a business outsources (project contracting), cost estimation requires a high level of detail, including overruns. Contractors need to provide detailed estimates of material costs, labor, and overhead costs so that clients can make a comprehensive assessment of the project&#039;s value and risks.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Cac_muc_do_chinh_xac_cua_du_toan_ngan_sach_trong_ke_toan_quan_tri\"><\/span><b>Levels of accuracy of budget forecasts in management accounting<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Depending on the stage of development of the project or plan, the level of detail and accuracy of the budget estimate will vary. There are three main levels:<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<table style=\"width: 100%; border-color: #000000;\" border=\"1\" cellspacing=\"2\" cellpadding=\"12\">\n<caption><b>Board:<\/b><span style=\"font-weight: 400;\"> Budget estimate level.\u00a0<\/span><\/caption>\n<tbody>\n<tr>\n<td style=\"text-align: center;\"><b>Estimate level<\/b><\/td>\n<td style=\"text-align: center;\"><b>Accuracy<\/b><\/td>\n<td style=\"text-align: center;\"><b>Purpose<\/b><\/td>\n<td style=\"text-align: center;\"><b>Characteristic<\/b><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left;\"><span style=\"font-weight: 400;\">Preliminary estimate<\/span><\/td>\n<td style=\"text-align: left;\"><span style=\"font-weight: 400;\">Short<\/span><\/td>\n<td style=\"text-align: left;\"><span style=\"font-weight: 400;\">The decision to start or cancel the project.<\/span><\/td>\n<td style=\"text-align: left;\"><span style=\"font-weight: 400;\">Based on expert experience, these are quick estimates, used only for initial idea screening (pre-feasibility study).<\/span><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left;\"><span style=\"font-weight: 400;\">Estimates by scale<\/span><\/td>\n<td style=\"text-align: left;\"><span style=\"font-weight: 400;\">Medium<\/span><\/td>\n<td style=\"text-align: left;\"><span style=\"font-weight: 400;\">Feasibility study and formal budget approval.<\/span><\/td>\n<td style=\"text-align: left;\"><span style=\"font-weight: 400;\">Based on extrapolated comparisons from similar projects in the past, with adjustments for differentiating factors (location, technology).<\/span><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left;\"><span style=\"font-weight: 400;\">Detailed cost estimate<\/span><\/td>\n<td style=\"text-align: left;\"><span style=\"font-weight: 400;\">High\u00a0<\/span><\/td>\n<td style=\"text-align: left;\"><span style=\"font-weight: 400;\">Project management, control, and evaluation of project success.<\/span><\/td>\n<td style=\"text-align: left;\"><span style=\"font-weight: 400;\">It requires a detailed breakdown of each cost item, cash flow, and resource. It forms the basis for tracking daily performance.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"font-weight: 400;\">As the table above shows, depending on the objectives and implementation stage, management accounting budget estimates can be prepared at various levels: from preliminary, to scale-based, to detailed. Understanding the characteristics and accuracy of each type of estimate helps managers optimize resources and effectively control costs throughout the entire business operation.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Phan_loai_du_toan_ngan_sach\"><\/span><b>Classification of budget estimates<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Budget estimates can be classified based on various criteria, each serving a specific management purpose:<\/span><\/p>\n<h4><span class=\"ez-toc-section\" id=\"Theo_thoi_gian_du_toan\"><\/span><b>According to the estimated time<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">Budget estimates can be categorized according to their implementation timeline, each serving a different management objective. Specifically:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Long-term budgeting: Typically spanning 5-10 years, involving major capital investment decisions (capital budgeting), and research and development (R&amp;D).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Short-term budget: Typically one year long, broken down into quarterly or monthly reports, focusing on day-to-day operations (revenue, production costs, selling expenses, administrative expenses).<\/span><\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Theo_moi_quan_he_va_muc_do_hoat_dong\"><\/span><b>Based on the relationship and level of activity<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">Based on the relationship between budget and actual activity levels, budget forecasts can be classified into two basic types, making it easier for managers to adjust and evaluate cost-effectiveness:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fixed Budget: This is prepared based on only a single level of activity (projected activity). Its advantages include simplicity and ease of preparation, but it limits cost control and assessment if actual activity differs significantly from the projected level.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Flexible budgeting: This is a set of budgets prepared for various levels of activity. It allows for budget adjustments based on actual activity levels achieved, making cost comparisons and control effectiveness assessments far more meaningful than with fixed budgets.<\/span><\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Theo_noi_dung_Kinh_te_hoac_Chuc_nang\"><\/span><b>According to Economic or Functional content<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">Budget estimates can also be categorized based on specific management objectives, thereby determining the economic content to be monitored or the specialized functions to be undertaken. Specifically:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">According to Economic Content: Sales forecast, direct material forecast, cost of goods sold forecast, etc.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">By Function: Marketing budget, Research &amp; Development (R&amp;D) budget, Production Cost budget, etc.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">After identifying the types of budget estimates based on time, activity level, and functional content, the next step is to select the appropriate budgeting methodology. Applying the right methodology not only ensures accuracy and feasibility but also enhances the participation and commitment of all departments within the enterprise.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Cac_phuong_phap_lap_du_toan_ngan_sach\"><\/span><b>Budgeting methods<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<figure id=\"attachment_6944\" aria-describedby=\"caption-attachment-6944\" style=\"width: 1200px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-6944\" src=\"https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Cac-phuong-phap-lap-du-toan-ngan-sach-ke-toan-quan-tri.jpg\" alt=\"C\u00e1c ph\u01b0\u01a1ng ph\u00e1p l\u1eadp d\u1ef1 to\u00e1n ng\u00e2n s\u00e1ch k\u1ebf to\u00e1n qu\u1ea3n tr\u1ecb\" width=\"1200\" height=\"800\" srcset=\"https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Cac-phuong-phap-lap-du-toan-ngan-sach-ke-toan-quan-tri.jpg 1200w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Cac-phuong-phap-lap-du-toan-ngan-sach-ke-toan-quan-tri-300x200.jpg 300w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Cac-phuong-phap-lap-du-toan-ngan-sach-ke-toan-quan-tri-1024x683.jpg 1024w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Cac-phuong-phap-lap-du-toan-ngan-sach-ke-toan-quan-tri-768x512.jpg 768w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Cac-phuong-phap-lap-du-toan-ngan-sach-ke-toan-quan-tri-18x12.jpg 18w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><figcaption id=\"caption-attachment-6944\" class=\"wp-caption-text\">Management accounting budgeting methods<\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">The choice of budgeting methodology directly impacts the practicality, feasibility, and level of employee involvement in the process.<\/span><\/p>\n<h4><span class=\"ez-toc-section\" id=\"Lap_du_toan_tu_tren_xuong\"><\/span><b>Top-down budgeting<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">Top-down budgeting is a method in which senior management predetermines the total budget for an entire project or organization. This budget is then allocated according to specific proportions or guidelines for each work area and functional department. Based on the allocated budget, lower-level managers then develop detailed budgets for their respective units, and this process is implemented sequentially down to the lowest levels of management in the system.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The top-down budgeting method has the following advantages:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Leadership Team&#039;s Strategic Perspective<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Streamline lower-level management who lack experience and a long-term vision.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Optimize resources and time.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The disadvantages of this method are:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It may lack practicality due to the absence of consultation from lower levels.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It is a waste of resources at the lower levels when they have a thorough understanding of the actual market but are not given a say in budget planning.<\/span><\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Lap_du_toan_tu_duoi_len_tren\"><\/span><b>Prepare the budget from the bottom up.<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">In contrast to the top-down approach, the bottom-up budgeting method starts at the direct management levels within departments or divisions. Each unit develops a budget plan based on its actual operations, which is then aggregated, reviewed, and adjusted through intermediate management levels before being submitted to the leadership board for approval of the overall enterprise budget.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The bottom-up budgeting method has the following advantages:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Built upon the practical experience of our employees.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The goals set are achievable because individuals are directly involved in the activity.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Create opportunities for lower-level managers to gain experience and improve their management skills.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Disadvantages of the method:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Gathering feedback from each department takes a lot of time to compile.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Estimated personal risk is higher than actual risk.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It creates a feeling of dissatisfaction when submissions are repeatedly rejected.<\/span><\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Du_toan_Thoa_thuan_hoac_du_toan_phoi_hop\"><\/span><b>Estimated Agreement or Coordinated Estimate<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">This is the most common and optimal method, combining the advantages of both methods above. The budget is formed through a multi-faceted negotiation and discussion process between senior and junior management.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Advantages of the method:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">High accuracy<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Increase the commitment and accountability of management.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Balancing strategic goals and practicality.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The drawback of this method is that it is costly in terms of time and effort to reach a consensus.<\/span><\/p>\n<h4><span class=\"ez-toc-section\" id=\"Du_toan_ngan_sach_theo_ky\"><\/span><b>Budget estimates by period<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">Instead of budgeting for the entire year and leaving it at that, the budget is continuously updated (typically adding a new month or quarter when the old one ends), maintaining a stable budgeting cycle (for example, always having a budget for the next 12 months).<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Advantages: Helps managers maintain a comprehensive overview of near-future plans and more accurate budget forecasts due to continuous adjustments based on the latest information, minimizing risks.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Disadvantage: Requires significant resources due to the need for frequent budget preparation and adjustments.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Nhung_luu_y_quan_trong_khi_lap_du_toan_ngan_sach\"><\/span><b>Important considerations when preparing a budget.<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">To ensure effective and highly useful budget planning, managers need to adhere to the following principles:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Enhance participation: Require active involvement from individuals with direct implementation experience, as they best understand actual performance and resource needs.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Establish a Contingency Fund: A reserve fund should be set aside (typically 5% \u2013 10% of total operating expenses) to handle unforeseen risks or situations.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Linking Costs and Time of Use: Cost estimates must be linked to the specific time when that resource is consumed. This is especially important for cash budgeting.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Comprehensive Cost Calculation: Each work item needs to have all three types of costs fully calculated: Direct Costs (materials, direct labor), Overhead Costs, and Management Costs.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Nguyen_nhan_dan_den_sai_lech_so_voi_du_toan_ngan_sach\"><\/span><b>Reasons for deviations from budget estimates<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<figure id=\"attachment_6943\" aria-describedby=\"caption-attachment-6943\" style=\"width: 1200px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-6943\" src=\"https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Nguyen-nhan-dan-den-sai-lech-so-voi-du-toan-ngan-sach.jpg\" alt=\"Nguy\u00ean nh\u00e2n d\u1eabn \u0111\u1ebfn sai l\u1ec7ch so v\u1edbi d\u1ef1 to\u00e1n ng\u00e2n s\u00e1ch\" width=\"1200\" height=\"800\" srcset=\"https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Nguyen-nhan-dan-den-sai-lech-so-voi-du-toan-ngan-sach.jpg 1200w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Nguyen-nhan-dan-den-sai-lech-so-voi-du-toan-ngan-sach-300x200.jpg 300w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Nguyen-nhan-dan-den-sai-lech-so-voi-du-toan-ngan-sach-1024x683.jpg 1024w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Nguyen-nhan-dan-den-sai-lech-so-voi-du-toan-ngan-sach-768x512.jpg 768w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2025\/10\/Nguyen-nhan-dan-den-sai-lech-so-voi-du-toan-ngan-sach-18x12.jpg 18w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><figcaption id=\"caption-attachment-6943\" class=\"wp-caption-text\">Reasons for deviations from budget estimates<\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">Analyzing the discrepancies between budget and actual results is the most important control function of management accounting. Common causes of these discrepancies include:<\/span><\/p>\n<h4><span class=\"ez-toc-section\" id=\"Hien_tuong_Duong_cong_Kinh_nghiem\"><\/span><b>The Experience Curve Phenomenon<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">The experience curve indicates that labor efficiency always improves with repetition. If the budget does not account for the gradual decrease in labor time per unit of product (as workers become more skilled), the labor cost estimates will be higher than reality. This requires budgeters to use more sophisticated labor cost forecasting models.<\/span><\/p>\n<h4><span class=\"ez-toc-section\" id=\"Muc_tieu_khong_kha_thi\"><\/span><b>The goal is not achievable.<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">Overly optimistic, unrealistic revenue or cost targets, or those that fail to adhere to the SMART (Specific, Measurable, Achievable, Relevant, Time-bound) principles, can lead to significant deviations. Unrealistic targets often stem from senior management pressure or a lack of in-depth knowledge of the process.<\/span><\/p>\n<h4><span class=\"ez-toc-section\" id=\"Khong_du_tinh_duoc_su_thay_doi_gia_cua_dau_vao\"><\/span><b>The change in input prices could not be predicted.<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">Market price fluctuations (inflation) for major input materials or services can disrupt forecasts. Solutions to address this include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Key Cost Analysis: Identify the inputs that account for the largest proportion of a cost and predict separate price trends for each.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Applying Inflation Adjustment Rates: Use different inflation rates for different expense items instead of a single fixed rate for the entire budget.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Using Futures Contracts: Using financial instruments to hedge against price volatility risk.<\/span><\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"Cac_nguyen_nhan_khac\"><\/span><b>Other causes<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Macroeconomic Risks: External factors such as changes in economic policies, taxes, laws, epidemics, or the emergence of disruptive technologies can negatively impact and exceed forecasts.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Misconceptions about Labor Productivity: The assumption that \u201cworkers and time can offset each other\u201d (increasing the number of people can compensate for time delays) is often incorrect. Adding people to a project that is already behind schedule often increases training, communication, and coordination costs, leading to cost overruns.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Ket_luan\"><\/span><b>Conclude<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">In management accounting, budget forecasting is not only a financial planning tool but also a foundation for cost control, performance evaluation, and strategic decision-making. When built using appropriate methods, budget forecasting becomes a &quot;guide&quot; that helps businesses use resources efficiently and proactively respond to fluctuations.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In an increasingly complex business environment, reviewing, standardizing, and optimizing the budgeting process for management accounting is essential. Businesses should proactively reassess their current budgeting system and consider seeking advice from experienced management accounting professionals to ensure that budgets are not only accurate in terms of figures but also genuinely support sustainable growth objectives.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Contact MAN \u2013 Master Accountant Network today for expert advice and to build a solid financial management foundation for sustainable growth.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Thong_tin_lien_he_MAN_%E2%80%93_Master_Accountant_Network\"><\/span><b>Contact information MAN \u2013 Master Accountant Network<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Mobile\/Zalo: 0903 963 163 \u2013 0903 428 622<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Email: man@man.net.vn<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Content production by: Mr. <\/span><a href=\"https:\/\/man.net.vn\/le-hoang-tuyen\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Le Hoang Tuyen<\/span><\/a><span style=\"font-weight: 400;\"> \u2013 Founder &amp; CEO MAN \u2013 Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.<\/span><\/p>\n<p style=\"text-align: right;\"><b><i>Editorial Board: MAN \u2013 Master Accountant Network<\/i><\/b><\/p>","protected":false},"excerpt":{"rendered":"<p>Trong b\u1ed1i c\u1ea3nh kinh doanh c\u1ea1nh tranh ng\u00e0y c\u00e0ng gay g\u1eaft, vi\u1ec7c qu\u1ea3n l\u00fd t\u00e0i ch\u00ednh hi\u1ec7u qu\u1ea3 l\u00e0 ch\u00eca kh\u00f3a \u0111\u1ec3 \u0111\u1ea1t \u0111\u01b0\u1ee3c c\u00e1c m\u1ee5c ti\u00eau chi\u1ebfn l\u01b0\u1ee3c. D\u1ef1 to\u00e1n ng\u00e2n s\u00e1ch kh\u00f4ng ch\u1ec9 l\u00e0 m\u1ed9t c\u00f4ng c\u1ee5 k\u1ebf ho\u1ea1ch t\u00e0i ch\u00ednh m\u00e0 c\u00f2n l\u00e0 tr\u00e1i tim c\u1ee7a h\u1ec7 th\u1ed1ng K\u1ebf to\u00e1n qu\u1ea3n tr\u1ecb [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":6942,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[13,16],"tags":[],"class_list":["post-5889","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kien-thuc","category-ke-toan-noi-bo"],"acf":[],"_links":{"self":[{"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/posts\/5889","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/comments?post=5889"}],"version-history":[{"count":3,"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/posts\/5889\/revisions"}],"predecessor-version":[{"id":6946,"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/posts\/5889\/revisions\/6946"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/media\/6942"}],"wp:attachment":[{"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/media?parent=5889"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/categories?post=5889"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/tags?post=5889"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}