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Has the budget outlived its usefulness in the 21st century? - Essay Example
Finance & Accounting
Pages 8 (2008 words)
Has The Budget Outlived Its Usefulness In The 21st Century? Budgeting like planning is supposed to give a roadmap through which financial obligation and responsibilities are to be approached. In budgeting, an estimate of the financial needs-expenditure and income are projected in every particular organization…
Budgeting also allows for proper accounting, it make it easier for accounting practices to be applied and used in making financial reports of the different environment (Bogsnes 2003, p.97). Therefore, whether budgeting is or not a prerequisite, it is a subject of serious debate that should be considered in more than one-way. Following this proposal to do away with budgets, researches have been done to evaluate and report on the efficacy of budgets in organization. One of the researchers done by Dugdale and Stephen reported that budgeting is still conseidered a very important tool in business and most firms still look upto its contribution in running the affairs of the organization. In this research, both financial and non financial organization were considered and 40 of such organizations were used in determining whether budgets are still an important factor in management (Dugdale and Stephen 2006, p.19). The managers of the organizations were followed in this regard and eigth of them eventually interviewed. The response in all the companies in which interviews were done confirmed that they rely on bugdeting as a tool in planning, communication, co-ordination and as away of measuting perfomance. ...