Outline the purpose of budgets within organizations

tripu | Student

A budget is of utmost importance to any organization. No organization will take a single step forward without a proper budget.

For example an Army prepares action plan before starting with a war, An architect prepares architectural design before starting the construction of a building, in the same way a business man needs a road map with regard to financial outlay needed for a project and that is nothing but a budget.

A budget is action plan or a blue print prepared in advance of action. Every department of organization needs a budget, that's why there various functional budget within  an organization like-

(1) Purchase budget.

(2) Sales budget.

(3) Material consumption budget.

(4) Production budget.

(5) Cash budget and finally

(6) the master budget which includes all the functional budget.

qettusa | Student

How budget helps to motivate employees in a business?