What are the practises of budget planning and management?

Answer 1

"What are the practices of budget planning and management?"Budget planning, whether it is done by an individual or by a business enterprise, involves the setting of targets for income and expenses in such a way as to achieve set financial objectives. The first step a company will take in planning is to establish its current financial condition. It then conducts an analysis of its environment, including the external environment such as the political, economic and technological situations, as well as the conditions of the market and competition; and also its internal environment relating to its performance, people, infrastructure, service delivery, and its customers. A SWOT analysis is also done through which the company identifies its strengths, weaknesses, opportunities and threats. Having identified its current condition and objectives and have seen the possibilities highlighted by the detailed analyses, the company now formulates strategies to produce the desired objectives.

Management of the budget involves implementation of the strategies that have been decided on, and the application of control mechanisms such as measuring and monitoring on specified dates and frequency, taking corrective action where necessary, to ensure projected results are achieved.