Unit 2 - Using bugets

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  • Created by: Georgia
  • Created on: 24-05-13 16:18

Unit 2 - Using bugets

Advantages

  • They provide direction and coordination
  • They motivate staff
  • They improve efficiency
  • They assess forecasting ability

Disadvantages

  • They are difficult to monitor fairly
  • Allocations may be incorrect
  • Savings may be sought that are not in the interests of the firm
  • Changes may not be allowed for when a budget is reviewed

Evaluation

A good budget should be consistent with the aims of the business and be based on the opinions of as many people as possible.  They should also set challenging but realistic targets.

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