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.