Busniess

Budgeting serves many functions for different purposes. Budget for example provides the detailed plans, expenditures, profit sales and losses of the organization. Budget is widely use among people and entities. It is one of the strategies that leads and prepares them from early upcoming possible problems. The term budgeting is very useful for people who would want to provide themselves with a rough gauge of their own expenses for the month. This also provides them with a rough comparison for expenses with the upcoming salary and expenses for the following month. Not only beneficial for own personal usage, it is also an important aspect for entities to draft out planning and setting their goals and targets to their designed direction. Budgets provide benchmarks for managers which to compare actual results and develop corrective measures, motivates and thus encourage managers to check what they had done and if there are any other alternatives ways for them to exercise success. In the following paragraphs, we will be discussing the reasons further as to why budgeting is the key component in management for a short and long-term planning.

The first few reasons why budgeting is an advantage as it examines the entities objectives. This monitors the performance of the entity, if it is actually growing and succeeding or whether it is not making. Because budgeting are the detailed planned out activities, staffed planning and financially categorized properly so with this it helps to improve the organization's working conditions by having the right amount of materials and assets needed in the office for a comfortable working environment. Budgets provide managers with informations such as the organization's performance and thus managers can take the necessary measures and creates guidance for managers to investors and creditors.

Followed by the next reason, budgeting helps to build good relation with customers and key suppliers. Having the strong relation with customers...