Budgeting concepts

Budgeting concepts

1. Role of budgets

   • Budget as a tool
     • Planning tool
     • Control tool
     • Motivational tool
     • Means of communication
   • As a formal quantification of mgmt's plan
     • 1)Corporations have goals for market share,profitability,growth,dividend payout etc,these goals cannot be achieved without careful planning about the allocation of resources and the expected results. 2)A budget lays out in specific terns an organization's expectations about the consumption of resourcese and the resluting outcomes
   • As overall planning and evaluation process
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