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Local Government Or A Non-Profit Organization
Finance & Accounting
Pages 5 (1255 words)
Budgeting is a systematic process that helps an organization to determine how the various services will be provided and financed. In simple words, a budget helps to determine on what basis dollars will be allocated to a particular activity
Budgeting process refers to determining expenditure needs of the organization in line with its overall objective and long term strategies. It is usually done after assessment of expected expenditure because its relevance is ultimately decided by judging the real expenditure and the proposed allocation in a particular program and also in overall budget. Thus, monitoring of budget is also an important part of the whole budgeting process. Budgetary variances between actual and budgeted allocations must be minimized to increase reliability of forecasting. Some of the common causes of budget variances are faulty assumptions, unrealistic expectations, traditional bias, and arithmetic errors by accountant. Budget has to be prepared in a systematic and disciplined manner so that it covers all financial constraints and have proportionate allocation of funds for respective programs. ...
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