BUSINESS BUDGETS as a Management Tool

Budgeting process and planning systems in businesses have a great importance in management accounting practices. Because business budgets are a management planning. Operating budgets provide the management with the opportunity to confront and solve all the problems that the organization is likely to face in the future. Thus, business administrations try to keep the effects of financial and non-financial problems they may encounter at the lowest level.
When the operating budgets are prepared correctly; (1) increasing efficiency by ensuring the effective use of resources, (2) increasing profitability with the efforts to achieve strategic goals, (3) timing of financial plans and liquidity success, (4) reporting targets between departments or departments and deviations from these targets at the end of the period. provides performance management.