A Budget is a comprehensive financial plan that outlines the expected action for achieving the financial operational goal of an organization.
Budget is also a focus of future events which is expressed in quantitative terms for a certain period of time. A budget is made by a process known as budgeting.
Business manager must plan with a budget to achieve the objective of a business in making profit or in usage of available resource and expenditure in a non profit making organization.
It also helps to evaluate the performance of departmental manager and their staff.
A budget prepared for the whole business organization is known as a Master Budget.
All economic entities use budgeting as follows.
1. Business organization use budget for growth and profitability.
2. Governments organizations use budget to achieve their desired objectives through usage of resources.
3. Non-Profit making organization budget to achieve their desired objectives through usage of resources.
4. Personal budget allows one to plan for expenses, savings and pay debts from an incoming future income.
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