Budget

Presentation
Introduction
• A budget is an operational plan for a definite period, usually a year, expressed in financial
terms.
• Can also be defined as a picture of the total operations of an enterprise shown in terms of
money.
• Provides sound financial management by focussing on requirements of the organisation.
• Focuses on the objectives and policies of the organisation.
• Ensures the most effective use of financial and non-financial resources.

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Why Budget?
• Planning future activities in an organisation.
• Enhances planning and decision making.
• Facilitates coordinating operations of various departments and sectors.
• Offers a useful format for communicating objectives.
• Helps to identify problem areas and facilitates effective solutions.
• Provides means for measuring and recording financial success with the objectives of the
organisation.
• Allows for feedback of utilisation of the budget.

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 Additional content

Advantages Disadvantages
• Fixes accountability, assignment of • Converts all aspects of organisational
responsibility, and authority. performance in monetary values.
• Encourages managers to make careful • May become an end in itself instead of
analysis of operations. means to an end.
• Weakness is revealed, corrective measures
are taken.
• Financial matters can be in an orderly
fashion.

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Thank you