A Budget Is Both A Plan As Well As A Control Tool
The budget is the main tool of financial management. Through it you can obtain a series of benefits because it provides the option of planning and control. In this sense, in this issue we want to highlight the budget as a control tool for good management of economic resources.
What is counter trade? Discuss the various forms of counter trade. What are the pros & cons of counter trade from firm’s point of view.
When implementing a control system, in any of the areas of life or business, what is being sought is to avoid the misuse of available resources. In other words, your goal is to optimize. That is nothing more than extracting the greatest possible benefit from a given resource. In the case of finance, the budget is that control tool. Which allows, to whoever uses it, establish a frame of reference to make consumption decisions according to a previous planning.
The budget as a control tool and plan –
- The way in which the budget becomes a control tool is through, initially, the same planning. On the basis that it sets the pattern of financial executions. That is to say, if a person plans that for the next month he will consume more fuel because he will have a greater transfer in his business route, then when contemplating this in the budget, a contingency is created that manages to solve said action.