Has The Annual Budget Outlived Its Usefulness?

Introduction The debate concerning the usefulness of figures continues to rage on. Many see them aboriginal to an organisations success, while others feel that they ar obstructive in an organisations pursual to optimise their success and they should therefore be abolished. This report is maculation with the advantages and disadvantages of cyphering and whether not it is still relevant in todays environment. It will also look at the alternatives to bud compacting such(prenominal) as break off budgeting which is improvements on the current approach and beyond budgeting which is a solution new idea that tot tout ensembley disregards the concept of budgeting. Budgeting Pros & Cons A budget is a plan of action for the coming course of guidance expressed in financial terms. (www.ci.berkeley.ca.us) Even though budgeting is criticised and businesses atomic number 18 being told to adopt new methods, it still remains favorite(a) among many businesses as it has many us es. Planning - A budget provides a detailed plan for the coming year of a companys resources and enables them to allocate them adequately in stray to achieve its objectives. For example, it enables a company answer certain questions such as; How much change will be withdraw? When itll be required? How long itll be required for? Whether cash will be available for investing?

Also, If cash-flow problems are likely to occur, a good budget can anticipate them and take you to prepare necessary adjustments, either by postponing expenditures, obtaining sooner (if possible), or using credit to smooth out the cycle (www.personalmoneymanagementexpert.com). ! communion -Budgets encourage different levels of an organisation to communicate with each other. This is all important(p) as different departments have different goals and for the organisations overall goals to be achieved it is necessary that they communicate with each other in military control of battle to strike a balance. (Drury) Motivation - A budget is utilize to motivate managers as what is expected of them is outlined...If you want to get a full essay, order it on our website: BestEssayCheap.com

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