A budget can be defined as the pattern of expenses and income that have been pre agreed by a business which establishes its goals for costs and revenues over any given period of time in the future.
The budget has several proposes for the business the adequate co ordination of business activities, provision of a focus for the future for business, it serves as a tool of motivation to exceed expectations, provision of analysis for the future, it provides a basis for evaluating past and present business performance, essential communication in the formulation of business plans for the future.
In order to set a budget, it's a pre requisite for the business to have well defined and feasible targets.
All parties must be in agreement with regards to its content. This enables proper co ordination across the entire business.
With a degree of flexibility in a budget plan, it enables the ability to modify and make necessary changes at short notice to account for unprecedented events.
Comments
No comments have yet been made