Budgets expresses the expected expenditure for a particular activity over a given period of time. It is also a process of tabulating the expected business growth and asset aquitision such as land, buildings and motor vehicles. Individual persons, corporated companies and partnership relationships can plan on how to spend on their wages and salaries in the process called budgeting. Businesses use the help of financial budgeting so as to establish mechanisms of how they are going to achieve their different goals and objectives. Lowering expenditure on budgets is the most important aspect of business budgeting. Cost accountants too can be used to provide professional advice to the businesses which are budget operational and oriented.
A project involves all the resources authorised and allocated for a particular purpose which is estimated to take a particular period of time. There is a project cost management system which is a technological innovation that touches on business project management to measure cost and income yeilds of the business. Project management systems are accurate as they use the history information of the business, uses the present data, and executes operations to project for the future results.
Cost estimation involves predicting on the estimate future project expenditure on the various functions of the business. If the budget falls to deficit, more money is pumped into the business to enable project completion but if the estimated cost falls into surplus, the remaining money is put back into the business and channeled into other activities. Project management is a sophisticated process which should be well implemented but with expectance of changing supervening events in that process.
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The set objectives should be practicable and should make sense to any reasonable man.
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The nature of the business should be well understood and the environment of its operation considered so as not to make budgetary measures blindly. Ancilliary resources such as raw materials and operational tools should also be valued and bought at economically fair prices but if they are too expensive, then hiring them is also another option that exists.
Some budgets require to be made with time deadlines or for others, not within a lesser timeframe than that which is stipulated as the legal one.The subordinates will love to stay and work in a business whose projects are successful and it will give them a sense of pride and belonging to the business. Budgeting could improve productivity as cost is kept at the economically sensible levels thus meeting the set objectives at a smaller period of time. Budgeting will improve the business goodwill as investors will for sure know that they are channeling money to a good course.