A budget is a systematic method of allocating financial, physical and human resources to achieve strategic goals. Companies develop budgets in order to monitor progress toward their goals, help control spending, and predict cash flow and profit. The central challenge budget developers face is mapping out the future—something that can never be done with perfect precision.
Important benefits of improving the budgeting process include better company-wide understanding of strategic goals, more coordinated support for those goals, and an improved ability to respond quickly to competition. This document discusses leading practices used by companies to develop budgets.