- What is a Budget? - a budget is a financial plan of action normally covering a specific time period, say six months or one year. It will describe expected levels of expenditure and revenues of a business. All budgets should be objective driven, this means that the expected revenues and expenditures of each department will be ultimately based on what the firm is trying to achieve.
- The Budgeting Process: typicall the budgetary process will involve the following procedure; establish the aims and objectives of the business, set production and marketing and financial budgets, budget should be broken down, procedures for monitoring budgets should be establish, any variance from predicted budgets should be examined and reacted to, the experience and knowledge gained should be applied to the setting of the following period's budgets.
- Benefits of Budgeting: improved management control of the organisation, improved financial control, allows managers to be aware of their responsibilites, ensure that limited resources are used where most effective, can motivate managers, can improve communication systems within organisations.
- Problems of…
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