Budget Should Not Be Regarded As A Master But As A Servant
ANSWER – “The budget should be regarded not as a master, but as a servant.” It is totally wrong to think that the introduction of the budget alone is enough to guarantee the success and security of future benefits. The budget is a quantitative statement of management plans and policies for a given period and is used as a guide for achieving the established objectives. It is also used as the standard with which real performance is measured.
A Budget Is Both A Plan As Well As A Control Tool
A manager looks to the future, looks for alternative courses of action and predetermines a course of action that must be taken in relation to known events and the possibilities of future problems. Therefore, the budget will do this work for the activities of a commercial company. I.C.M.A., London defines the budget as “The budget is a financial and / or quantitative statement, prepared before a defined period of time, of the policy that will be applied during that period in order to achieve a certain object” The budget is a written document that refers to a defined future period.