ADVANTAGES OF PERIODIC BUDGETING:
These are following advantages of periodic budget applications in a manufacturing company:
- Periodic budget clarifying the business planning.
- Establishing coordination between functions of different departments.
- Measuring and controlling the work efficiency.
- It helps to manage the business finance.
- Informing about the business plans to the related parties.
- Normally there are following objectives of Budgeting:
In view the study I’d like to recommend that:
- The company should factor in some slack and make sure that you have more than enough money socked away or coming in before expanding the business or taking on new employees.
- While many firms draft a budget yearly, small business owners should do so more often. In fact, many small business owners find themselves planning just a month or two ahead because business can be quite volatile and unexpected expenses can throw off revenue assumptions.
- Don’t be afraid to shop around for new suppliers or to save money on other services being performed for your business. This can and should be done at various stages, including when purchasing or starting up a business, when setting annual or monthly budgets, and during periodic business reviews
Periodic budgeting is the powerful tool to control company expenses and to achieve the expected revenues. There should be strong coordination among each department and among each element of periodic budget to achieve the desires results and to maximize the company’s profitability.