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Organizational budgets assist businesses leaders with awareness of expenditures and managing resources. Businesses use a variety...

Organizational budgets assist businesses leaders with awareness of expenditures and managing resources. Businesses use a variety of budgets to measure their spending and develop effective strategies for maximizing their assets and revenues. Organizational budgets are generally designed to meet specific needs of the organization.

  • Discuss the benefits that may be achieved by creating a business budget.
  • Discuss the likely organizational problems that may arise from not creating a business budget.

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Expert Solution

Benefits which may be achieved by creation of a business budget-

A. it will help in proactive estimation of all such expenditure and income in advance and it will be help in planning of the future related operations

B. Benefits of budgeting would be reflected into better performance of the company and it will help the company in remaining featuristic in nature.

C. Budgeting will also be helpful in managing with various kinds of changes in environment at will be helping the business in accommodating the changes

D. Budgeting will be helpful in achievement of various goals of the organisation and it will be leading to deficiency in the management

Disadvantages due to not creation of a business budget-

A. it would not be leading into a proper business planning and business will not be having any response to various events

B. It can lead to excessive expenditure on certain projects and it can be impacting the liquidity of the company

C. it can even increase the financial distress caused because there will be no proper management of the debt, which has been taken by the company

D. It will also lead to no synchronisationof the current objective the long-term vision because the company will not be trying to manage its operation in respect to the overall vision.

jeff jeffy answered 2 years ago
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