In accounting, a budget is a quantified plan of action for an upcoming accounting period.
In the modern, cut-throat operating environment, businesses are realizing the immense importance of robust budgeting systems.
Budgeting identifies available capital, provides an estimate of expenditure and anticipates incoming revenue. Through budget monitoring, businesses can measure performance against expenditure and ensure that resources are available for growth initiatives. Budgets help the business owner concentrate on cash flow forecasting, cost reductions, profit margin enhancement and returns on investment.
An effective budgetary planning and control system will:
- Ensure the achievement of the entity’s goals & objectives
- Compel planning
- Communicate ideas and plans
- Co-ordinate activities
- Provide a framework for responsibility accounting
- Establish a system of control
- Motivate employees to improve their performance
A&A’s experienced accounting team offers budgets advisory and guidance in Kenya.
