Question

What are some advantages and benefits to utilizing performance measures in budgets?

Answer 1

When we are preparing our budgets based on the performance measures then we can say it has the following benefits:

1. Helps to increase accountability in the public sector and not for profit organization.

2. Clear the objective on which the money is going to be spent. It becomes easier to assess the performance and correct the deviations.

3. Improves the performance of the programs on a continuous basis. It leads to the overall operational efficiency of the organization and overcomes the limitations of traditional budgeting.

4. Helps in bringing transparency in the budget preparation and taking better financial decisions for the allocation of resources.