Question

can you please write a General "Report"about(Advantages and Challenges of Budgeting)

Answer 1

ADVANTAGES AND DISADVANTAGES OF BUDGETING

The budget is the estimation of future inflows and outflows in a absolute manner with the help of past performance and values involved.

The major advantages of budgeting is as follows

• By the early detection of errors in future the management can take appropriate steps to overcome the errors in a careful manner
• It direct the way to create most profitable outcome with limited resources
• It coordinates the organisation in sectors and bring unified process and employees will be motivated by achieving goals
• It control the income and expenditure and manage the income according to the budget
• It provide a disciplined and systematic approach to the problems expected on the budget

The major challenges is as follows

• It is not a exact science, it is predicted using the past values and it may go wrong or right
• The budget is always depended on the target achieved by the employees and this process involved the conflict among the employees
• Employees work will be limited to the target of the budget
• Budget is not a substitute for a management, it gives a path with management act accordingly

Even though budget plays a vital role in the organisation for a better future of the business.