Topic 1 Budget: definition and necessity

DEFINITION

Budget is the quantitative expression of an action plan, a tool for the coordination and implementation of the program.

The most efficient way to deal with changing circumstances in the course of an organisation is to establish an action plan, a well-designed budget preparation system for income and expenses.

✔Constitutes the “compass” for the action designing of an organisation.

✔Contributes to the definition and achievement of objectives.

✔Offers measurement means of the actual output of any actions/ activities.

✔Allows managers to monitor, control and direct the activities of the business.