Budgeting Basics and Beyond
Chapter One
The What and Why
of Budgeting:
An Introduction
A budget is defined as the formal expression of plans, goals, and objectives of
management that covers all aspects of operations for a designated time period.
The budget is a tool providing targets and direction. Budgets provide control over
the immediate environment, help to master the financial aspects of the job and department,
and solve problems before they occur. Budgets focus on the importance
of evaluating alternative actions before decisions actually are implemented.
A budget is a financial plan to control future operations and results. It is expressed
in numbers, such as dollars, units, pounds, hours, manpower, and so on. It
is needed to operate effectively and efficiently. Budgeting, when used effectively,
is a technique resulting in systematic, productive management. Budgeting facilitates
control and communication and also provides motivation to employees.
Budgeting allocates funds to achieve desired outcomes. A budget may span any
period of time. It may be short term (one year or less, which is usually the case),
intermediate te ... read full excerpt from Budgeting Basics and Beyond, 2nd Edition ebook
