Budgeting - A Budget is a plan expressed in financial terms.

BUDGETING A Budget is a eat up expressed in monetary terms. C.I.M.A. defines a figure as A invention quantified in financial terms, prep bed prior to a defined period of time... to square up a given objective, A budget is norm eithery for a relatively short period, e.g. 1 year. Purposes of Budgeting A number of purposes of budgeting have been identified. They entangle: 1.         Planning. 2.         Resource Allocation. 3.         Co-ordination. 4.         Control. 5.         Communication. 6.         Motivation. 7.         Performance Evaluation. Budgetary Control This is a system which uses budgets as a means of controlling the activities of the placement. It has trey main aspects:- 1.         Planning. 2.         Co-ordination. 3.         Control. Planning Budgetary planning is the b vow of preparing detailed, short-term plans for all the functions, departments and activities of the brass. It is all-important(prenominal) that the short-term plans and objectives that experience up the budget are related to the long-term plan and objectives of the formation. The budget may be drawn up by preparing an boilersuit budget for the organisation which is and then broken imbibe into more detailed budgets for the divers(prenominal) parts of the organisation [the top-down approach] or by forge budgets for the various parts of the organisation and then bringing them in concert to build up the overall budget [the bottom up approach].

Extrapolations, Forecasts and Plans In discussing budgetary planning it is important to hear between extrapolations, foretells and plans. An extrapolation is the proceed projection of an existing trend. A forecast pass on be based on an extrapolation, unless is adjusted to live with neb of any known factors which allow affect the trend. A plan involves nearly intervention by the organisation in order to shift events in such a way as to hold up it more likely that the organisations objectives willing be achieved. Co-ordination It is spanking that the plans of... If you indispensableness to get a in effect(p) essay, order it on our website: Orderessay

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