Budgeting

Good Essays
Topics: Management, Budget
“Budgeting is a key component in management short and long term planning”

INTRODUCTION

Budgeting (or profit planning) is a process or technique with broad applications in the management of a business, school or government agency. The rules apply to not-for-profits, as well. The process involves the formation of definite and specific plans or budgets for a limited future period, usually the ensuing fiscal or calendar year. These plans, which take into account all phases of the budgeted operations, are given expression in financial terms. They also become standards against which to measure and evaluate actual performance as the period progresses. Budgeting is, therefore, not only a short term planning and coordinating process, but is also a means of exerting management control over budgeted operations. Budgeting becomes a management process rather than a financial one.

I agree the statement "Budgeting is a key component in management short and long term planning.". A budget is a financial plan and a list of all planned expenses and revenues. It is a plan for saving, borrowing and spending. It means budget is very particular plan for a company so that a company can actually know about the financial problem. In business, budgets help you determine how much money you have and how you will use it, and help you decide whether you have enough money to achieve your financial goals. As part of a business plan, a budget can help convince a loan officer that you know your business and have anticipated its needs.
Budget is not like target. Target can leading a company to know what they actually needs to do. But budget can help a company to do it right. It can help a company on financial and strategy. A company's budget is a bit more involved. Most companies will start with a master, or static, budget. A static budget is a budget with numbers based on planned outputs and inputs for each of the firm's divisions. It's the first part of budgeting, which determines how

You May Also Find These Documents Helpful

  • Powerful Essays

    Budgeting and beyond budgeting Introduction With the economic rapid develop recently, more and more companies pay attention to the cost budgeting, some people think that this is a good and efficient way to operate the company, it will take more benefit for them. However, some people believe that it is a inefficient method, it will waste long time and capital to do, and bring the little profit. This essay wills analysis this issue from the different parts. The first part, it will talk about the…

    • 1620 Words
    • 6 Pages
    Powerful Essays
  • Best Essays

    budgeting

    • 3087 Words
    • 13 Pages

    Topic Gateway Series Budgeting Budgeting Topic Gateway Series No. 27 1 Prepared by Louise Ross and Technical Information Service Revised March 2008 Topic Gateway Series Budgeting About Topic Gateways Topic Gateways are intended as a refresher or introduction to topics of interest to CIMA members. They include a basic definition, a brief overview and a fuller explanation of practical application. Finally they signpost some further resources for detailed understanding and…

    • 3087 Words
    • 13 Pages
    Best Essays
  • Good Essays

    Budgeting

    • 807 Words
    • 4 Pages

    budget is a key management tool for planning, monitoring, and controlling the finances of a project or organization. It estimates the income and expenditures for a set period of time for the particular project or organization. The main purpose of budgeting system is used for control. Budget has it own essential features, which includes policies, data, documentation and period. A budget id based on the policies needed to fulfill the objectives of the entity. Data is usually expressed in monetary terms…

    • 807 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Budgeting

    • 2197 Words
    • 9 Pages

    capacity to undertake this kind of analysis. It is likely to take many years for such an evolution to occur. In the meantime, how should developing countries be advised to move forward? It would be argued that there are two key issues on the planning/budgeting relationship which need to be clearly distinguished. First, how prominent a role should…

    • 2197 Words
    • 9 Pages
    Powerful Essays
  • Good Essays

    Budgeting

    • 770 Words
    • 4 Pages

    Budgeting is a key component in management short and long term planning A budget is a key management tool for planning, monitoring, and controlling the finances of a project or organization. It is also defined as management’s quantitative expression of plans for forthcoming period. It also estimates the income and expenditures for a set period of time for your project or organization. Budgets are prepared at various levels of an organisation. Effective budgeting can allow managers to perform…

    • 770 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Budgeting

    • 1301 Words
    • 6 Pages

    An in Depth Look at Budgeting Budgeting plays an important role in many small businesses and large corporations. It is also considered the key to financial management. (Civicus) Why are budgets so important to businesses? Having a well developed budget will inform the company on how much money it will take to carry out its activities and will lower the possibility that the business will go bankrupt. “Budgets are used in managing the operations of government agencies, churches, hospitals, and other…

    • 1301 Words
    • 6 Pages
    Good Essays
  • Satisfactory Essays

    Budgeting

    • 646 Words
    • 3 Pages

    Irina Vanessa Lintermanns Verschüer A01200345 September 26, 2011 Homework: Questions of budgeting 1. Discuss some of the major benefits to be gained from budgeting. It motivates the executives to define the basic objectives of the company, it gives a structure to the company by defining the responsibilities of each of the parts that forms the organization, it motivates and rises the participation of all workers of the company, it obligates to maintain a control document with historical…

    • 646 Words
    • 3 Pages
    Satisfactory Essays
  • Better Essays

    Budgeting

    • 1565 Words
    • 7 Pages

    we have been able to generate data which says about the profession of cost estimators (CIMA, 2009). Cost, time overrun, benefit, demand and revenue shortfall are the problems of budget does not hit the target for the mega projects (CIMA, 2009). Budgeting is defined as “the process of allocating an organization’s financial resources to its units, activities and investments” (Blumentritt 2006, p73). Although budgets are often stated in terms of money, they need not be, and can also relate to quantities…

    • 1565 Words
    • 7 Pages
    Better Essays
  • Good Essays

    Budgeting

    • 2411 Words
    • 10 Pages

    Financial Modelling CHAPTER 3: BUDGETING The difference between a forecast and a budget A business forecast is an estimate of the likely position of a business in the future, based on past or present conditions. However, a budget is a statement of planned future results which are expected to follow from actions taken by management to change the present circumstances. Budgets as tools for planning and control Planning Managers are responsible for planning and controlling a business for the benefit…

    • 2411 Words
    • 10 Pages
    Good Essays
  • Good Essays

    Budgeting

    • 2043 Words
    • 9 Pages

    Chapter 9: Budgeting Discussion Questions 9.1 State the different types of budgets that may be prepared. Different budgets include: sales or fees budget; operating expenses budget; production and inventory budgets; budgeted income; cash budget; budgeted balance sheet; and the capital budget. P9.7 Preparation of receipts from debtors schedule and cash budget Ken Martin, manager of Lonnie Car Repairers, has requested that you prepare a cash budget for the months of December and…

    • 2043 Words
    • 9 Pages
    Good Essays