What is a

What is a budget is a plan of action to meet a target, and values expressed in financial terms, to be performed in particular time and under certain conditions laid down, this concept applies to each responsibility center organization. Functions of budgets 1. The main function of the budget relates to the financial control of the organization. 2. Budgetary control is the process of discovering what is being done by comparing the results with budgeted data corresponding to verify or counteract the gains. 3. Budgets can play both preventive and corrective roles within the organization. Importance of Budgets are budgets useful in most organizations: Utilitarians (business companies), non-utilitarian (government agencies), large (multinational conglomerates) and small businesses. 1.Budgets are important because they help minimize the risk in the operations of the organization. 2. Through the budget remains the operational plan of the company within reasonable limits. 3. They serve as a mechanism for reviewing policies and corporate strategies and directions for what they truly seek. 4. Quantified in financial terms the various components of its overall plan of action. 5. The budget lines serve as guides for the implementation of personnel programs in a certain period of time, and serve as a standard of comparison once you have completed the plans and programs. 6. The procedures induce advisory specialists think the total needs of the companies, and to engage in planning so that they can be assigned to various components and the necessary importance alternatives 7. The budgets are means of communication between units at one level and vertically between executives from one level to another.A network of budget estimates are filtered up through successive levels for further analysis. 8. The gaps, duplications or positions can be detected and treated at the time that managers observe their behavior in relation to the development of the budget.