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Budget: An agreed plan establishing, in numerical or financial terms, the policy to be pursued and the
anticipated outcomes of that policy.
- They provide direction and coordination. Budgets ensure that spending is geared towards the
aims of the business rather than those of the individual, and they can ensure a united approach within
an organisation.…read more

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Changes may not be allowed for when a budget is reviewed. External factors outside the control
of the organisation may affect budget holders' ability to keep to their plan. The airline industry has
needed to increase its expenditure budgets because of terrorist activities; high oil prices have
affected firms' heating budgets. Sometimes internal changes, such as a reorganisation, can lead to
increased costs or savings that were not originally included in the budget. These changes must be
allowed for in any review of the budget.…read more

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