The Benefits of Budgets

Various potential benefits of budgets & budgeting such as:

  • coordinating business and service operations
    • plan ahead – often reveals need for action which may have been otherwise forgotten
    • learn – effective budgeting systems contain feedback loops
  • motivating managers
    • budgetary targets focus attention

Performance judged against targets – must be achievable, realistic, negotiated rather than imposed. If not, they can demotivate.
Goals & objectives within budget should be communicated as presents a subset of organisations overall objectives. Some may be confidential though and are not suitable for dissemination.


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