Question

Discuss any eight uses of a budget to a business enterprise.

Answer 1

1. Budgeting is a systematic strategy that aligns the planning of all functional executives towards a shared profit target.
2. Budgeting encourages leaders to prepare ahead by pushing them to formulate their planned effects.
3. Budgeting encourages early and timely problem analysis. Managers should take care and conduct thorough research before making choices.
4. Creating a budgeting system helps staff understand the need to conserve business resources.
5. A budget allows businesses to compete efficiently while keeping costs low.
6. Budgetary control promotes effective communication by facilitating idea-sharing and plan coordination across management levels.
7. A budget is a quantifiable plan for the future that controls a business's income and expenditures. It regulates money spending and reveals losses, waste, and inefficiency arising from performance.
8. The budget ensures that resources are allocated appropriately based on the firm's priorities.