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Explain some of the major benefits a company gets when using a budget.  

Explain some of the major benefits a company gets when using a budget.  

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Answer :

Budget is the estimation of revenue or expenses over a specified period of time. It is a financial plan for a particular period.

The major benefits a company gets when using a budget are as follows :

  • It hepls in forecasting cashflows.
  • It provides a financial road map.
  • It hepls management in planning and formulation of policies.
  • It helps management to convert onjectives & goals in numerical terms.
  • It hepls in directing both capital and revenue resources.
  • It hepls management in fixing responsibilities.
  • It hepls in identifying inefficiencies and weaknesses.
  • It provides accurate predictions of consumer demand.  
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