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Advantages of Budget:
1-force the company to establish goals
2-determine the resources necessary to achieve those goals.
3- Force management planning
4-provide performance evaluation
5-promote communication & coordination within the organisation
> better Cash Planning
> Revenue projection
> Save costs
> Provide for financial risks that the company might face in the future
> Push the different departments in the company to meet management targets
Budget helps to establish a guideline of the expenditures and the forecast for the incomes any deviations are compared to the budget and hence achievement or under performance is compared to the budget.
We can allocate our remittances and expenses properly maintain in future planning
Planning orientation The process of creating a budget takes management away from its short-term, day-to-day management of the business and forces it to think longer-term.
The process of creating a budget takes management away from its short-term, day-to-day management of the business and forces it to think longer-term. This is the chief goal of budgeting, even if management does not succeed in meeting its goals as outlined in the budget - at least it is thinking about the company's competitive and financial position and how to improve it.
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Advantages of budget
1. Help planning annual operations
2. Help to coordinate the activities of the various parts of the organization and ensuring that the parts are in harmony with each other.
3. Help communicate plans to the various responsibility center managers.
Help motivate managers to strive to achieve the organisational goals.
5. Help to control business activities and assist to evaluate the performance of managers.
it helps in acheiving coordination as activities in an organisation are inter related it coordinates the expected performance of each department ans gives a consildated picture
it aids planning with numeric expressions
it helps in fixing responsibilities and target
promotes division of work and specialisation
1.Planning orientation.
2. Profitability review.
3. Assumptions review
4. Performance evaluations
5. Funding planning.
6. Cash allocation
7. Bottleneck analysis
