Role of Budgeting in Company Performance

Role of budgeting

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Part A......................................................................................................................................3
Relation among shorter term plans and budgeting:................................................................4
Part B......................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Budgeting is method of glancing at the projected income (the funds that emerges into the
company through sale of goods and services) and spending’s (the money going out in the context
of the payment of bills and wages) in the long term over a particular period. It helps a company
to recognise that with these estimated earnings and investments manager will be wealthy enough
to afford and run their business at expected pace. Softconic is an IT company which is selected in
this report; it produces word processing software for computers alongside a range of other
collaborative applications.
The report cover, importance of budgeting, types of budget and the most important budget
for Softconic which will help to survive profitably in pandemic situation.
MAIN BODY
Part A
The principle of budgeting is a critical element in the performance of any company.
Management makes recommendations on whether to move on by budgeting that can be carried
out by individuals or teams, depending on the organization's composition and difficulty.
Budgetary control is the foundation of any effective company development strategy by
predicting sales, setting priorities and allocating capital to various outlets. Thus, the first aspect
of spending plan offers is a broader perspective for the management team. An assessment of
whether the company is located must be taken before further warning is made. Budgeting's
primary function is only to develop both short and long-term plans. Budgeting plays a key role in
reshaping medium-term proposals into shorter-term proposals, thereby enabling strategic
decisions to leverage on shorter-term opportunities and possibilities because no business will
remain stuck (Otley, 2016).
Through constantly analysing the current state of the company, executives have the ability
to see at the company's prospects. Budgeting enables project leaders to evaluate what type of
growth would be practicable. Every budget will make strategic sense in the lack of a broader
business reform strategy and make better use of such plan in the context of Softconic. Every
budget must come from inside the framework of corporate strategy, which helps managers to
consider what other form of market place the firm holds, what is the customer base of the