Budgeting to an Organisation or Business

This essay explores the benefits of budgeting within an organization, focusing on Tesco Plc. It discusses the objectives of budgeting, the necessity of budgeting, and the different types of budgets. Budgeting helps organizations gain a competitive advantage, track financial goals, and optimize financial resources.

BUDGETING TO AN
ORGANISATION OR
BUSINESS

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
CONCLUSION ...............................................................................................................................6
REFERENCES ...............................................................................................................................7

INTRODUCTION
A budget refers to an financial plan that is used for a defined period of
time i.e. around one year. It includes a particular amount of monetary value
that represents as in various terms like sales volumes and revenues, assets,
liabilities and cash flows. Budgeting to an organisation is a essential tool that
is suitable for planning and controlling within the working place. This essay
involves the Tesco Plc. That is one of the largest retailing grocery company
in UK that deals in varieties of products like food, clothing, furniture, financial
services etc. to maintain the success it is very essential to make a effective
budget. This essay report includes the benefits of budgeting within the
organisation that helps in gaining the competitive advantage at marketplace,
tracking the financial goals for avoiding the over spending of money and
saving it for more successful investment etc. the major purpose of this report
is to gain the knowledge about the budgeting within the business enterprise
and in what manner company use Budget and gaining the higher
profits(Asogwa and Etim, 2017).
MAIN BODY
Budgeting refers to an financial approach that is used to controlling,
planning and coordinating the task with an appropriate monetary value for a
specified period of time. It is a quantitative statement that is prepared for a
definite period of time of the policy to be pursued for gaining the higher
objectives(O’Grady and Akroyd, 2016). To an organisation budgeting forces
the management to examine and research the issues so that it can be solved

on time. It also helps in generating the care and cautions among line
managers. It provides the guidelines for future plan of actions in financial
form. In case of Tesco, Budgeting helps in planning and forecasting the
expenditure and performance in consists of sales, purchase, plant utilisations
etc. in this manager also use the Budget for controlling the activities by
comparing the actual results with the set targets. Due to this in business
efficiency can be maintained(Bogsnes, 2016).
The main objectives of budget to an organisation is to control and
formulate the plan of actions that helps in taking effective decisions. It is the
best activity for the top level manager to directs the operations of a
company in an appropriate way(Malenko, 2019). It helps the organisations to
estimate accurately the business revenues and expenses for a set period of
time that helps in taking the decisions which gives the successful results to
the business firm. It also helps in making effective coordination and
cooperation among the team members. Another main purpose of making the
budget is to optimally use the financial resource that gives profitable results
to the company like Tesco Plc. It reflects as a core tool for the business and
organisation because it assist in managing the money and avoid the wastage
of money(Henttu-Aho, 2016).
Budgeting is very beneficial for an business enterprise because it helps
in gaining the benefits related to the financial objectives. The major benefits
of the budgeting is to attracts the large base of investors so that image of
the company would be enhanced. This also significant for maximising the

profit margin by doing little investment. In terms of Tesco, Budegt helps the
manager to make decisions effectively about the salaries, bonuses, benefits
etc. of the employees that will not exceed the operating expenses. This also
helps in making more investment in the project that will create more
opportunities for the business future growth. Focusing on making the budget
helps in improving the clarity of thoughts in spending the financial resources
in achieving a particular target. It also beneficial in providing the confidence
in taking decisions(Kaye III, Frances J. and III 2016).
The major requisites for preparation of a budget to an organisation is
delegating the authority and responsibility to the capable person so that task
can be achieved in an effective and essential way(Rogulenko and et. al.,
2016). Making a Budget is necessary for knowing the information related to
future terms activities that facilitate in getting more growth. In terms of
Tesco, Budget can be prepared for examine and analysing the manufacturing
cost of the goods and services so that they will gain high profit
margin(Kengatharan, 2016).
There are various type of budget that is used within the business such
as fixed budget, flexible budget, performance budget etc. In this Tesco can
adopts the fixed budget for measuring the short term and long term budgets.
It helps in measuring the profits easier. In this flexible budget refers to that
which is changes and adjust according to the volume or activity. It is more
beneficial for the Tesco because it helps the business to sustain in the

competitive market by focusing on the regular new trends(Weigel and Hiebl,
2018).
By analysing the above essay report budgeting helps the business
organisation to gain more profits by beating the competition by taking
effective decisions. It also helps in following the proper business environment
that helps in growing the market share of the firm in the future context.
CONCLUSION
From the above essay report it is to be concluded that budgeting in
organisation is an effective term because it helps in gaining the higher
profits and revenues by reducing and eliminating the more spending from
completing the task. It includes the objectives of budget and the necessity of
the budget that helps in showing the benefits for the business firm. By
properly following the budget company can gain large market share and it
also helps in taking effective decisions that gives appropriate results to the
success of the firm(Lepori and Montauti, 2020).

REFERENCES
Books & Journal
Asogwa, I.E. and Etim, O.E., 2017. Traditional Budgeting in Today's Business
Environment. Journal of Applied Finance and Banking. 7(3). p.111.
Bogsnes, B., 2016. Implementing beyond budgeting: Unlocking the performance potential. John
Wiley & Sons.
Henttu-Aho, T., 2016. Enabling characteristics of new budgeting practice and the role of
controller. Qualitative Research in Accounting & Management.
Kaye III, F.J., Frances J. Kaye and III, 2016. Automatic budgeting system. U.S. Patent
9,495,703.
Kengatharan, L., 2016. Capital budgeting theory and practice: a review and agenda for future
research. Applied Economics and Finance. 3(2). pp.15-38.
Lepori, B. and Montauti, M., 2020. Bringing the organization back in: Flexing structural
responses to competing logics in budgeting. Accounting, Organizations and Society. 80.
p.101075.
Malenko, A., 2019. Optimal dynamic capital budgeting. The Review of Economic Studies, 86(4),
pp.1747-1778.
O’Grady, W. and Akroyd, C., 2016. The MCS package in a non-budgeting organisation: a case
study of Mainfreight. Qualitative Research in Accounting & Management.
Rogulenko, T. and et. al., 2016. Budgeting-Based Organization of Internal Control. International
Journal of Environmental and Science Education. 11(11). pp.4104-4117.
Weigel, C. and Hiebl, M.R., 2018. Beyond budgeting: review and research agenda. Journal of
Accounting & Organizational Change.