Outline the purpose of budgets within organizations
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.
How budget helps to motivate employees in a business?