A company use budgeting to accomplish goals for growth and sustainability with the finance at hand. The major objectives are as follows:
1. To provide a realistic estimate of income & expenses and financial position
for a period
2. To provide a coordinated plan of action which is design to achieve the estimates
3. To provide a comparison of actual results with those budgeted and an
analysis and interpretation of deviations by areas
of responsibility to indicate courses of corrective actions and to lead to improvement
in
future plans
4. To provide a guide for management decisions in
adjusting plans
and
objectives
5. To provide a ready basis for making forecasts during the budget period to guide management in making day to day decisions