A budget is a financial plan of something for a particular period of time. It may involve the estimates of future sales and revenues, profits or income of a given business. Budgets are formulated every where form the private sector to the public sector. Businesses use the help of financial budgeting so as to establish mechanisms of how they are going to achieve their different goals and objectives. Lowering expenditure on budgets is the most important aspect of business budgeting. The main function of these professionals is to provide advisory services to businesses so as to ensure they attain their much anticipated goals and targets.
The management team of the business and the shareholders should also take part in determining how the budgeted funds are to be implemented so as to attain the most desirable results in the business. It involves estimation, scheduling, accounting and design. Project management systems are cheap as compared to employing project management personel in the business who will require salaries and remuneration at the end of each month or contractual period.
Cost estimation involves predicting on the estimate future project expenditure on the various functions of the business. If the budget falls to deficit, more money is pumped into the business to enable project completion but if the estimated cost falls into surplus, the remaining money is put back into the business and channeled into other activities. There is supposed to have some floating money in a business accounts or in cash which is undertaking a project so as to cushion itself at these changing economics from time to time.
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The set objectives should be practicable and should make sense to any reasonable man.
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The budgetary process should be followed and different considerations made before drafting a competent budget. Ancilliary resources such as raw materials and operational tools should also be valued and bought at economically fair prices but if they are too expensive, then hiring them is also another option that exists.
The timeframe should be well thought through, deliberated by the management and a final decision made.The subordinates will love to stay and work in a business whose projects are successful and it will give them a sense of pride and belonging to the business. Budgeting could improve productivity as cost is kept at the economically sensible levels thus meeting the set objectives at a smaller period of time. An objective business has higher chances of success thus, budgeting is a positive measure that all businesses should enforce.