From: Karl Lomas, Finance Director

To: Finance Officer

Subject: Budgeting and accounts receivable recoverability

The Senior Management Team $($SMT$)$ ?is interested in understanding how beyond budgeting differs from our incremental budgeting system. At the same time, the SMT is keen to understand our delivery costs in more detail so I hired Markop Market Analysis $($MMA$)$ ?to carry out an industry$-$wide survey of delivery systems. I have attached extracts from their report in Table $1.$

Please prepare a briefing note for the SMT which explain the differences between incremental budgeting and beyond budgeting using the information in Table $1.$

$[40$ ?marks$]$

Table $1$: Report extract from MMA of industry$-$wide tractor delivery systems

A survey was sent to the Operations Directors of tractor manufacturers.

$\backslash$table$[[$Questions:$,\backslash$table$[[$Yes$],[($Note $1)]],$Additional Information $($Note $2)],[\backslash$table$[[$Do you use KPIs in conjunction$],[$with budgeting for delivery costs?$]],76\%,$Customer satisfaction, innovation$],[\backslash$table$[[$Do you prepare budgets more than$],[$once a year?$]],50\%,\backslash$table$[[$Examples of budget periods given$],[$were monthly, rolling and$],[$quarterly$.]]],[\backslash$table$[[$Can you see delivery methods$],[$changing in the future?$]],70\%,\backslash$table$[[$Carbon offet, electric vehicles,$],[$infrastructure$]]],[\backslash$table$[[$Do you track deliveries in real$],[$time$?]],40\%,$Increasing use of vehicle tracking$]]$

Notes

The percentage shows the respondents who answered "Yes" to the question.

The survey asked respondents who answered 'Yes" to give additional information and$/$or reasons for their answer. easons for their answe