Toyota Company is likely to use a flexible and case budget. The use of a flexible account is because of the diversification of the operation of the company. There is a change in the allocation as the activity or quantity (Cooke, 2004). In the Toyota company, there has been a fluctuation in revenue from the years 2016 to 2020. that makes the flexible budget the most appropriate. Cash budgets give room for future predictions. In Toyota company, they are projected to have a constant revenue generation so the cash budget will be useful in making their prediction. My organization will need to receive a cash budget. Such is because the company aims to revise some of its financial documents so that there can be an extension of the suppliers' contracts. In such a situation, receiving the cash budget will come in handy as it will be possible to review the transactions made by the supplier and plan for the next contract (Cooke, 2004). If there were negative cash balances in the review, it would be essential to consider the contract's extension. The budget will also assist in revising some of the items that are not available in the income statement. I have participated in the budget-making process in my organization. The key concept in the process is to align the goals with the approximated amount. The amount does not need to be precisely as it is a budget. However, in my organization's budget-making, I learn that it is better to overquote a figure in the account instead of underquoting. If the excess amount is due to overquoting, it will be easy to carry forward to the next financial year. However, if the amount is less due to underquoting, it will be hard to fill in the remaining amount after the budget's approval.
Reference
Cooke, R. (2004). The McGraw-Hill 36-Hour Course in Finance for Non-Financial Managers: Budget Reporting and More Budgets (2 nd Ed.). New York: McGraw-Hill. Pp. 186-203. Print.
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