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on Budgets - Coursework Example
Finance & Accounting
Pages 8 (2008 words)
BUDGET Date What is a budget? A budget is a plan of action that a company expects to use in the course of its operations. Budgets are fundamental aspects of any company and it is therefore prudent that we have a budget in any act of an organization that we do…
Budgets are prepared in definite procedural definitions. They can be prepared for the business as a whole; they may fall under designated departments. Budgets can also be prepared for functions of the organization such as sales, production or even for the asset utilization of the organization (Hammonds, 2006). A budget can as well be prepared for the resources of the company such as financial resources and even other resource items of the organization such as cash, capital expenses, relevant purchases of the firm and not excluding labor. Work force is the most vital for any firm to run since it is that which supports production and without production there can be nothing much to brag about involvement in business (Label, 2010). Why budget? A budget is not just a tool that can be used for any mere business operations. They are not mere calculations that are simply drawn, calculated and findings just presented. They are elaborate plans hence involves a construction of a plan that is geared for use for a quite a longer duration and hence a tool for financial management (Gowthorpe, 2005). A business that operates without a budget is as good as dead since it is likely to experience management difficulties in the organization. ...
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