E-Star Stationery Management Accounting
- DISCUSSION
Once the business is operational, it’s essential to plan and manage its financial performance. Creating the budgeting process is the most effective way to help us to keep our business on track. From our interview session with Mr. Chua, we can say that Mr. Chua and his brother had knowledge of budgeting since they did a budgeting process at the end of each year to ensure that their business is not making loss and can survive in this industry.
How Mr. Chua do the budgeting for E-Star Stationery? From our interview, he said that he does it in yearly basis budget normally in December. He and his brother will discuss and do the budgeting process via WhatsApp but also sometimes they will do it by meeting face to face. As we know that E- Star stationery is a small business so the budget is only involving the owner, Mr. Chua and his brother and they also not provide specific paper work for budgeting. They consider the survey from his customer and his staff to do the budgeting of their products.
This is really different from a big company who does their budgeting when they involve and interact with all teams and led by the financial leader and the CEO. The big company involve the entire senior team because they also have control over a meaningful team and piece of business (Zementa, 2010). In a large company they will make a paper work or a file that have all their budgeting information so that they can refer either they achieve their target or not and also to do the next budgeting for next year. Furthermore, in a big company they consider all expense, revenue that reliable to do their budgeting but for the small company normally they only include some cost and expense. There is different way on how a big company and small company doing their budgeting process and it depends on the owner himself how they plan to do their budgeting process.
Every year, Mr. Chua expected that their sales will increase year by year same goes to their profits but unfortunately he said that because of changes on taxes from GST to SST that government implied this year, the price of the certain goods need to be increase therefore, the demand will decrease. This will affect the budgeting process that he and his brother does since they expect increment in their sales and profits. SST rates are less transparent than the GST which had a standard 6% rate, the SST rates vary from 6% or 10%. The table below shows the different between GST and SST to calculate the price of the goods. (malaysiakini,2018)