Why is an annual budget important?

you may have monthly and quarterly budgets, but the annual  budget  is important but it will be approved by the partners, I am talking from my experience in oil & gas companies

Annual budget is a mirror which reflects an Organization's vision/plans to be executed/implemented during the fiscal year. It is, one can say, a test of the Top Management's abilities. For example what goals they want to achieve, and how much can they spend on. As it is a statement of income and expenditure, so priorities are set according to income. The best budget is one wherein adequeate resources are allocated to each head under which a priority/goal is to be achieved. 

The annual Budget is as follows:

• - Is the process of creating formal plan and translating to goals into a qouantative time .
• - A budget is a realistic plan for the future expressed in quantitative tearm , Financial and non- financial .
• - A budget is an operational plan and a control tool for an enttity that identifies the resources and commtments needed to satisfy the entity's goals over a period .

An annual budget is mainly done to estimate the expenses for the forthcoming year and HOD will ensure that his departmental expenses are within the budget. 

It has to be approved by the Board  if its a shareholding company. If the Board approves only90% of the budget, the HOD will have to reduce the expenses accordingly. This will help the company to limit its expenses below the revenue level. 

• It sharpens your understanding of your goals
• It gives you the real picture - by accurately showing you what you can afford and where the gaps in funding are, your budget allows you to plan beforehand to meet needs, and to decide what you're actually able to do in a given year
• It encourages effective ways of dealing with money issues - by showing you what you can't afford with known income, a budget can motivate you to be creative - and successful - in seeking out other sources of funding
• It fills the need for required information - the completed budget is a necessary element of funding proposals and reports to funders and the community
• It facilitates discussion of the financial realities of the organization
• It helps you avoid surprises and maintain fiscal control