}A budget is a quantitative or financial plan relating to the future, a plan of what the organisation isaiming to achieve and what has been set as a target.
}It can be for the company as a whole orfor departments or functions or products or for resources such as cash,materials, labour,etc.
}It is usually for one year or less.
}Forecast is an estimate of what is likely to occur in the future
}Planning – the budgeting process forces management to look ahead, set targets, anticipate problems and give the organisation purpose and direction.
}Control – the budget provides the plan against which actual results can be compared.
}Co-ordination – a sound budgeting system helps to co-ordinate the different activities of the business and to ensurethat they are in harmony with each other.
}Communication – budgets communicatetargets to managers.
}Motivation – the budget can influence behaviour andmotivate managers.
}Performance evaluation – the budget canbe used to evaluate the performance of a manager.
}Authorisation –budgets act as authority to spend.
