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Finance & Accounting
Pages 4 (1004 words)
Ned Kelly Business Plan – Benefits of Budgeting [Student’s Name] [Course Title] [Instructor’s Name] [Date] To: Ned Kelly From: Date: Subject: How Budgeting Aids in Achievement of Business Goals Attaining the goals set for a business is a priority of every entrepreneur, and various methods and managerial techniques are being quoted by experts as to how an entrepreneur can ensure the attainment of his or her business’ objectives.
Budgeting in business is beneficial not only because it enables projecting the yearly expenses to be incurred while following a certain plan, but it also allows to determine how costs will incur and how can they be controlled resulting in efficient operations (Dury, 2008; Albrecht et al., 2008). As for instance, without doing any budgeting of the business activities, an entrepreneur may only be able to visualize to a certain extent that what expenses will be incurred and how they will be financed and what revenues would be required to keep the business profitable. But, on the other hand, with budgeting the entrepreneur is in fact able to foresee that what expenses will be incurred and how much revenues will be required to cover those expenses and at the end make profits. This in turn allows not only setting up targets for revenue generation, but also allows ascertainment of cost controlling techniques (Jiambalvo, 2010; Horngren & Harrison, 2009). In this regard, cash budgeting is considered as one of the most beneficial and important procedure to forecast the results of a certain business approach or plan on monthly basis (Horngren & Harrison, 2009). ...
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