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BUDGETING A Budget is a plan expressed in financial terms. C.I.M.A. defines a budget as 'A plan quantified in monetary terms, prepared prior to a defined period of time... to attain a given objective', A budget is normally for a relatively short period, e.g. 1 year. Purposes of Budgeting A number of purposes of budgeting have been identified. They include: 1. Planning. 2. Resource Allocation. 3. Co-ordination. 4. Control. 5. Communication. 6. Motivation. 7. Performance Evaluation. Budgetary Control This is a system which uses budgets as a means of controlling the activities of the organisation. It has three main aspects:- 1. Planning. 2. Co-ordination. 3. Control. Planning Budgetary planning is the process of preparing detailed, short-term plans for all the functions, departments and activities of the organisation. It is important that the short-term plans and objectives that make up the budget are...

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