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Accounting Budgeting

In: Business and Management

Submitted By simmoune
Words 871
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I agree with the statement “ Management of any business will be ineffective without the preparation and use of budgets”. Basically budgeting is the process of planning to spend money. With budgeting it would be easier to prioritize our spending and focusing our money. I agree with the statement because based on the research conducted it says that budgeting can ensure that we will always have enough money for the things that we need. In one of the website that I found stated that budgeting is only balancing the income and expenses. There would be problems if the expenses and the income is not balance, such as your expenses will be bigger than your income and it would bring a big impact for the savings.
Since budgeting is very important, we wont be easily got broke. However the budgeting plan will work out if only you follow the spending plan. It would be very useless if u don’t follow the spending plan that you make to manage your money. All the people that can earn their money by themselves will use budgeting so that they can prevent from excessive spending. Budgeting will also gives you information which things you should prioritize, like food and house living costs first. Don’t you think it is good if you can keep your finance on track ? Don’t you think it is really useful if you have emergency saving money? So budgeting is a planning and controlling tool, in businesses the masters of budget has to know how to use revenue and expenses and also they have to look back to the past to analysis the income and the outcome. With that the masters can plan the budgeting for the present time. In businesses budget is also used in purpose of controlling. The word controlling here means to not overspend and carefully use the money for expenditures. Of course there are advantages and also disadvantages of budgeting
Here are some advantages of budgeting: 1. With budgeting we can control our money

* We will be stress if we are broke, wont we? By budgeting we can have emergency money. It can decrease the possibility of getting stressed out because we have emergency money when we are lack of fund.

2. More focus on money goals

* With money budgeting we can avoid buying unnecessary items. And we can save the money until we reach our goal.

3. We can produce more money

* If we can eliminate such things like penalties, interest and late fees.
Maybe small money like that is seemingly useless but they can add up to be a saving money over time

4. It helps us to organize our money between spending and saving

* By dividing between saving and expenditures we can make the boundary. So that we can buy things without using any of our savings 5 It makes us aware for our income and outcome. * With budgeting we will know where is our money going and how long does it take to spend lets say 1000 dollars and also knowing which things we can afford and which one we can’t
Secondly, budgeting also have 2 major disadvantages, here they are: 1. Waste of time * Budgeting consumes lot of times to make especially in a under-average company 2. Inaccuracy * Some assumptions are involved in certain budgets which makes the outcomes and the incomes not balance 3. Not experienced * Some people don’t have any experience in making cash budget so the budget would not be perfect

In conclusion budgeting is really important, without it all management ,without any exception will not be effective. Even though that budgeting has some disadvantages but it is worth it to make like it is helpful for businesses so time would not be a problem if you want to have a successful business. I believe inaccuracy is a human error so it can be prevent with some good analysis and calculation. And it is shown that budgeting has more advantages than disadvantages. Budgeting is usually used to plan and controlling businesses. It is not only for businesses for ordinary workers, labors, and even students. Me myself once tried to use budgeting and I am a student with budgeting, I am the one who control the money for my expenditures and savings. I can also eliminate unnecessary things and can save a quite amount of money to buy my priority things. And also lastly, the disadvantages can’t be compared to the advantages because they brings a big good impact to your money savings.

Reference List:

10 Benefits Of Budgeting Your Money (n.d.) Retrieved on 24th of July 2013 from: http://www.budgetingincome.com/10-benefits-of-budgeting-your-money/ The Disadvantages Of Budgeting (n.d.) Retrieved on 26th of July 2013 from : http://www.accountingweb.com/blog-post/disadvantages-budgeting

What Is Budgeting (n.d.) Retrieved on 30th of July 2013 from : http://www.mymoneycoach.ca/what-is-a-budget-and-budget-planning-forecasting.html

Budgeting And Business Planning (n.d) Retrieved on 2nd of August 2013 from: http://www.infoentrepreneurs.org/en/guides/budgeting-and-business-planning/

The Reasons For Business Budgets (n.d) Retrieved on 2nd of August 2013 from: http://bizfinance.about.com/od/businessbudgeting/a/BusBudgets.htm

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