BUDGETING

IVY Y. JORDAN, RL
MLIS -2
• The term budgeting refers to the process of budget planning
and preparation, budgetary control and related procedures.
The formal presentation of the plan is called budget. Budget
is the written statement of income and expenditure during
the year. It covers all items of work to be taken up over a
specified period of time in future.

• Budgeting is usually done on early basis. The most central

aspect of financial management of library is the budget,
which is a statement of income and expenditure of the
library.
 Budget as a control
device
• Budgetary control devices include budgets such as production
budget, cash budget, capital budget, sales budget etc.

1. Cash budget: Cash budget gives the estimated receipts and

payments for the budget period and indicates the position of
cash arising from it. It shows the cash requirements at
various times of the budget period and helps the
management in planning and arranging cash for the business
concern.
2. Capital Budget: Capital budget gives the estimates in
respect of the capital resources of the business concern. It
also states the plans with the estimated cost for investment,
expansion, replacement, etc. Thus the budget serves as a
device for planning capital expenditure.
3. Sales Budget: Sales budget gives a comprehensive sales
programmed and plans for a specific period. It states the sales
potential in terms of quantity, values, period, product, etc. Sales
budget is one of the important budgets because it is the basis for
preparing other types of budgets.
4. Selling and Distribution Cost Budget: This budget gives the
cost of selling and distribution of the products during the budget
period. It includes costs of selling and distribution such as cost of
insurance, packing, storing, transport, advertisement, sales
commission, market research etc. Generally, the sales manager,
advertising manager and distribution manager take responsibility
to prepare the budget.
5. Production Budget: This budget is also known as output
budget and is based on sales budget. It indicates the quantity of
units to be produced during the budget period. This budget helps
in maintaining optimum balance between production, sales
inventory position of the firm. This budget is prepared by the
production manager.
6. Production Cost Budget: Production cost budget which is
based on the production budget, lays down the estimated cost of
carrying out the plans relating to production. Production cost
budget is sub-divided in to various sub-budgets like labour
budgets, raw material budget, production overhead budget, etc.
7. Labour Budget: Labor budget gives the estimated
requirements of labor for carrying out the estimated production
during the budget period. It may state both direct and indirect
labour requirements. Generally, the personnel department
prepares the labour budget in coordination with other concerned
departments.
8. Raw Material Budget: This budget which is prepared by the
production department gives the estimated requirements of raw
materials of different types for carrying out production during
the budget period.
9. Production Overhead Budget: This budget lays down the
estimates of all production overheads to be incurred for carrying
out the estimated production during the budget period. It breaks
up the production overheads into fixed overheads, variable
overheads and semi-variable overheads.
10. Master Budget: Master budget is summary of all functional
budgets and indicates how they affect the business as a whole. A
master budget generally includes particulars regarding sales,
production, cash position, fixed assets, labour, factory overhead,
administration overhead, and selling and distribution overhead,
major financial ratios and profit.
 Budget as a control
device
• Budgetary control devices include budgets such as production
budget, cash budget, capital budget, sales budget etc.

Essentials of Effective Budgetary control

1. Effective Organization: The concern should be effectively
organized and the responsibilities of each departmental managers
are clearly defined and the line of authority sharply drawn.
2. Quick reporting: The subordinates must send reports on
performance without any delay. The managers on their part must
analyze the report and take necessary action immediately.
3. Support of top management: The top management must
have a clear idea of the objectives of budgetary control and
should implement the budgetary control programmed seriously
in order to infuse a sense of seriousness among the subordinates.

4. Reward and Punishment: The employees whose

performance is according to the budget plans should be suitably
rewarded and the employees whose performance is not as per
budget should not go unpunished.

5. Appropriate Authority: The employees who are entrusted

with the responsibilities of implementation of budgetary control
should also be given appropriate authority to do so. If a person
lacks authority to enforce his decision, it is difficult for him to
fulfill his responsibilities
6. Flexibility: If the circumstances warrant, the management
should not hesitate to alter the budget figures. But at the same
time, care must be taken to see that the budget figures are not
altered too much or too often.
 Advantages of budgeting and budgetary control

• Compels management to think about the future, which is

probably the most important feature of a budgetary planning
and control system.
• Promotes coordination and communication.
• Clearly defines areas of responsibility. Requires managers of
budget centres to be made responsible for the achievement of
budget targets for the operations under their personal control.
• Motivates employees by participating in the setting of budgets.
BUDGET CYCLE
• The budget cycle refers to the life of a budget from creation to
evaluation.
• The budget cycle is the process in which companies
and governments create, evaluate and approve budgets.

The budget cycles consists of four phase:

1. Preparation and Submission
2. Approval
3. Execution
4. Audit and Evaluation
PREPARATION & SUBMISSION
• The first step of the budget process is to create it. How much
income is needed and what new initiatives can be started
should be considered.
• The completed budget is submitted to the individuals who need
to review, make recommendations and approve it. This might
occur between you and an accountant. The budget might move
back and forth between preparation and submission until all
parties accept the document.
APPROVAL
• Budgets aren't approved on a yes or no basis. Instead, they're
the subject of debate.
• The approval segment depends on the size of your business

EXECUTION
• Once a budget is approved, it’s time to implement it.
AUDIT & EVALUATION

• The audit and evaluation segments occur after the accounting

period ends. An internal or external audit examines the
financial activities during the accounting period, assesses
compliance with the budget and measures the accuracy of
projections used to create the budget. The evaluation provides
a final report on the budget and the audit and makes
recommendations for the next budget cycle and budget.
• Even the best planned budget should be reevaluated from time
to time and, if need be, revised.
REFERENCES
• https://smallbusiness.chron.com/4-phases-budget-cycle-71723.html
• https://yourbusiness.azcentral.com/budget-cycle-2165.html
• http://www.lisbdnet.com/library-budget-objectives-methods/
• http://www.fao.org/3/w4343e/w4343e05.htm
 LIB. 3.0
Ivy Y. Jordan, RL & Gina T. Daul, RL
What is LIB 3.0?
• Belling et al. (2011) explain that the term Library 3.0 refers to
the use of emerging technologies such as the semantic web,
cloud computing, mobile devices, and established tools like
federated search systems, to facilitate the development,
organization and sharing of user-generated content through
seamless collaboration between users, experts and librarians.
• Library 3.0 is a virtual complement to the physical library
space, and should ideally work seamlessly within established
library systems, services and collections.
• The main goal of Library 3.0 is to promote and make library
collections widely accessible, searchable and usable.
Fundamental principles of Library 3.0
1. The library is intelligent - An intelligent library is self-
renewing, flexible, functional, integrated, efficient, resilient,
autonomous and sensitive (adaptive). Library 3.0 model applies
artificial intelligence systems to offer intelligent services to library
users. Library intelligent systems facilitate natural language
processing, mapping of free-text terms to controlled vocabulary
used by library tools like indexes, flexible and heuristic retrieval
strategies (Bailey, 1991; Wahono, 2000). Intelligent library systems
make libraries to become more interactive, accurate and user-
friendlier (Dent, 2007).
2. The library is organized - The Library 3.0 model is designed to
turn the unorganized web of information into a systematic and
usable body of knowledge by exhaustively describing and linking
every piece of data to enable ease of access. Library 3.0
information organization strategies provide a way of unifying
scattered information and accessing even the Invisible Web.
3. The library is a federated network of information pathways -
Library 3.0 tools draw together diverse information sources and
platforms to create a robust information network working
seamlessly to facilitate fast, accurate and systematic information
searching and retrieval (Chauhan, 2009; Belling et al., 2011).
Federation of collections in Library 3.0 is enhanced through
cloud computing systems which connect diverse device and
location independent information tools.
4. The library is apomediated - Apomediation is the term for
social mediation of information. The term, which originated in
the health discipline, is derived from the Latin word “apo” which
means to stand by or next to (Eysenbach, 2008; O’Connor,
2010). Even though apomediation is largely driven by peers,
librarians in a Library 3.0 environment can take up the role of
apomediaries as well.
5. The library is “my library - Library 3.0 tools enable librarians
and library users to create appropriate personal and professional
profiles that help to tailor the library services and products to
their needs. Some of the personalized services may not even be
official or universal services (Cohen et al., 2000).
Emerging roles and competencies of
3.0 librarians
• Core competencies are skills, knowledge, abilities and attributes that
employees are expected to possess so as to contribute successfully in
an organisational context (McNeil 2002). Some scholars of
librarianship suggest that librarians working in 3.0 environments face
a role shift in which traditional competencies become less prominent.
• In spite of the fact that most 3.0 libraries operate on a sophisticated
technical platform, Gutsche (2010) suggests that librarians should not
depend entirely on technology but should continue to make efforts to
offer services at a human level with a human touch.
• The technology competencies include electronic communication,
core hardware, Internet, core software, core operating systems,
applications, web design and development, enterprise computing,
networking and security, server administration, technology project
management, technology policy development and technology
training.
Features and Applications
• Web OPAC - One of the key aspects of Library 3.0 is Web
OPAC. A Web OPAC is a library catalogue on the Web or
Intranet. Users can search the required information by
connecting to Uniform Resource Locator (URL) of Web OPAC
anytime during the day and from anywhere in the world. It is
programmed to facilitate the library’s members to access the
OPAC through their own search for the ease of borrowing
instead of searching through the card catalogue.
• Ontologies - Ontologies are used for annotating information to
the web content and expressing its semantics in a machine-
readable manner. These are the techniques to give richer
semantic relationships. Ontology aims at how the information
is organized rather than organizing the information.
• Ubiquitous Contents - The ubiquitous computing offers various
contents which can be used or reused frequently. The contents of
this generation need to be created in various formats and can also
be easily shared, transferred and accessible through all modes of
communication. Ubiquitous contents are the personal contents of
the people persistently stored on the web in the form of movies,
blog spots, RSS feeds, wikis, stories, articles, music, games etc.

• Geo Tagging - This helps users to find specific information

located at specific location. It is simply a marking of various
media or digital contents like images, photographs, videos,
websites or RSS feeds etc. Most of the cellphones and mobile
devices have GPS (Global Positioning System) facilities.
• Virtual Reference Service - Virtual reference primarily refers to a
network of expertise, intermediation and resources placed at the
disposal of someone seeking answers in an online environment. In
virtual reference service, apart from helping the users in personal
or telephonic way, libraries are now developing the contents which
can easily be transferable and readable in cellphones and other
mobile devices to help users at any point of time.
• Semantic Web - The Semantic web provides a common
framework that allows data to be shared and reused across
applications, enterprise and community boundaries. It is a
collaborative effort led by W3C with participation from a large
number of researchers and industrial partners. Its objective is to
convert all the unstructured documents on the Web into a web data.
- It is based on the Resource Description Framework (RDF). It will
provide us with the option to share, unite, search and organize the
web information in easy manner.
• Cloud Computing - Cloud Computing’ means using the
Internet and central remote servers to maintain data and
applications instead of maintaining data on individual
mainframe computers or PCs. In short, cloud computing refers
to the technologies that provide software, data access, storage
devices that do not require physical location of the system. It is
one of the most important Library 3.0 applications that is
gaining popularity day by day.
• Mobile Library Catalogues - The use of mobile phones and
mobile applications has increased dramatically over the past 10
years. At present not many libraries in India offer mobile
friendly versions of their websites and LMS.
• Quick Response Code ( QR Code) - A QR Code is a matrix
barcode readable by smart phones and mobile phones with
cameras. They are sometimes referred to as 2d codes, 2d
barcodes or mobile codes. It is one of the important aspects of
Library 3.0.
• Federated Search - Modern day searching is synonymous
with Federated Searching which is one of the aspects of
Library 3.0. It can help users to take greater advantage of
online resources offered by libraries. Many online databases
need different logins, look vastly different and search and
display results in different ways. It would be easier for users to
have all the search results displayed in one place and in one
way , much as a Google Search does.
Responsibilities of Librarian
3.0
• In today’s times the role of the LIS professional is that of a
bridge between an information specialist- the subject matter
experts and the users.
• Web 3.0 technologies and ontology have enabled Library 3.0
and have brought about fundamental changes in the way the
information is collected and disseminated. With the role of the
information professional becoming more and more prominent,
the library professional will have to additionally learn about
the related subjects along with the existing knowledge base.
The library personnel will have to be professional in their
approach and deal with various matters intelligently keeping in
mind the target audience
REFERENCES
• http://www.ijnglt.com/files/Vol%202%20Issue%201/Anindiya.pdf
• https://www.researchgate.net/publication/296059319_Library_30_intelligent_libraries
_progressive_librarians/link/56d1d43c08ae85c8234ace99/download