Budget Management Analysis

1509 words 7 pages
Budget Management Analysis

Budget Management Analysis
A budget is a tool that helps managers to ensure that the required resources are obtained and used effectively and efficiently as the organization moves towards achievement of its objectives. A budget is stated in terms of money and is usually made for one year depending either on the prior year’s budget or on existing programs (Cleverly & Cameron, 2007, p. 330). Creating a working budget is a very difficult undertaking, and for the budget to be functional, an organization must stick to the budget very closely. No matter how closely a budget is followed, there will be variances. Organizations can expect such variances and be able to work such situations into budgetary
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137). Such information is critical in stabilizing tax and fees levied on certain services because the world is still facing the consequences of recession.
Ensuring Budget Accuracy
The purpose of developing a budget is to provide a guideline to the spending done by an organization. As indicated earlier, it is important to stick to the budget or keep as close to it as possible. This way, the money is spent well and can be accounted for. The organization will not need to go form some financial loans. Remaining accurate is often a challenge for the organizations (Deschamps, 2004, p. 651). Several techniques can be used in the attempt to maintain accurate budget adherence. The first strategy is to ensure that the budget is aligned with the strategy of the organization. This allows management to identify the priorities of the organization and identify if the goals of the organization are being supported. The second strategy is to boost the correctness of forecasting and planning. Using the most realistic estimates usually translates into the most realistic outcome because there will be very minimal variation in cost (Deschamps, 2004, p. 651). The third strategy is to enhance the organizations agility in budgeting and its’ review. When a budget is reviewed, some mistakes that could have been overlooked can be corrected for better outcomes. Finally, it is imperative to offer the best insights for

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