Business Budgeting And It`s Advantages And Shortcomes

BUDGETING

Business activities for the future period are planned with forecast in systematic way by planning ,organizing ,coordinating and directing towards to achieve a fixed objectives. If a business runs their activities when and there as required for the time they will not succeed anything and end up with wastage of economic resources.

Business should be planned by analysing their available resources . They consider the past business information which will assist to fix the future target. The coordination of business activities such as production,procurement ,sales and human resources are take vital part for the success of the business. Therefore they should be wisely coordinated in the budgeting.

Advantages

1. The activities are coordinated

2.The resources are linked with target so the target oriented process

3. The success rate becomes obvious

4. Time frame with target

Disadvantages

1. The decision making limited and implementing level are not involve in the process of budget

2. The employees` ability is limited with in budget

3. Higher the target which is impractical make high labour turnover

4. budget prevents skill of handling unplanned activities which suddenly raise according the market situation.