Importance of Budgets Essay
1.1 IMPORTANCE OF BUDGETS Budgeting is important process in organization. A budget process that works well could produce benefits as follow. * To pre-determine the capital expenditure of business. * To plan and control the income expenditure of organization. * To operate various divisions, units, department …show more content…
The term goal represents targets, specific in quantitative term to be achieved in a specific period of time. The timing of introducing new products, purchase of new plant and machiner and expected rate of return are example of time and qualitative goals.
220.127.116.11 Strategy formulation stage. The next step involves laying down the strategies.
Strategies denote specific method or courses of action to achieve the goal, for instance, promotion of sales through price reduction or aggressive advertisement and so on.
18.104.22.168 Budget Responsibilities.
Type of Budgeting Methods There are two establish method for budgeting: top-down and bottom-up which is best for your project depends on your organization’s standard approach to decision making. Does management dictate most mandates? Or is the staff expected to produce ideas and decision that percolate up to management for final analysis? Your answer to this question will determine the most likely budgeting approach for the project.(G. Michael, 2007). Bottom-up Budgeting In bottom-up budgeting, staff members get together and attempt to hammer out a budget from the task-level detail. As a group, they can speak frankly one member might have a solution that’s superior to other. It’s also a good way to avoid missing a subtask. If any group member forgets