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Importance Of Budget In Business

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Budget is becoming more and more important in company or organization nowadays, the enterprise can get the benefits when adopted the budget. Budget is a good way to execute the strategic plan of the company. However, set the budget is not enough, the enterprise need to use the budgetary control to make the budget plan running effectively and efficiently.
Budget
• Budget:
Budget is always used as a scheme in which managers used a lot to translate their strategic plans into quantitative plans in a specified period. Budget is very famous not only in big organizations but also in small companies or groups, even though the household’s daily consumption. Budget is becoming more and more important in recent business world. It shows managers’ perspectives …show more content…

While in flexible budget the restaurant can buy more tables to make their customers no need wait that long time, in the meantime can earn more profits as they can serve more customers to generate more revenues. However, static budget allows the company to maximize its revenues and ensure its every penny of spending as wisely as possible. The company can use this 2 method of budget to control its business activities, they can use the static budget to set an overall guideline and use the flexible budget to control some activities which is hard to set from the beginning of the strategic plan. Flexible can bring the mobility that the static budget is lacking …show more content…

Through budgetary control the company obtain the chance to make changes and adjust or amend the current strategic plan on the right way to be successful. Every company cannot always be lucky when they adopt their budget into real activities, they need change or adjust it based on the cost and the profits it generated. Budgetary control make the financial officials much easier to make corrective decisions before the issue of the budget grow and become hard to change.
2. Budget can coordinate different departments into same or different activities as a whole. Different departments or modules in the same company can contribute their efforts into the activities. The good way of the company unite all the modules together is the budgetary control. Thus can improve the performance and coordination of the company.
3. Budgetary control can use to track the progress of the project or activity. Budgetary control make managers easier to track the progress of the project. Leaders can use the budget data to allocate resources and enhance coordination among the different departments. The budget data is easy to see as they are normal accounting items and figures the managers have get used to

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