Budget advantages and disadvantages: Budgets fixed the Targets and Goals, without which operation lacks Direction.

Reduction in cost and elimination of inefficiency is achieved automatically. It is a good guide to the management for making future plans. It is on the basis of budgetary control,realistic budgets can be drawn. It aims at maximization of profit through cost control and proper utilization of resources. Financial crisis can be avoided, since budget provides advance information. Disadvantage of budget: 1.If we have limited budget, unexpected opportunity are missed due to lack of funds. 2.Budget can be seen as pressure device imposed by Management. This resulting in Bad lobour relation. In accurate record keeping. 3.It is difficult to reconcile personal/individual and corporate goals. 4.Managers may over estimate cost so that they will not be blamed in the future should they over spend as. 5.Budgeting is time consuming process.During the preparation period, the business conditions may change and estimates may go wrong by that time. 6.Department conflicts arises due to: Dispute over resource allocations

Departments blaming each other if targets are not attained. 7.Budgets deals with future.Forecasting is necessary for budgeting. Forecasts and estimates are rarely cent per cent.The success largely depends upon the degree of accuracy of the estimates.