One of the most important aspect in strategic planning is the budgeting function is planning how to raise funds, whether being venture capital, PE funding, IPO etc. The budgeting system allows to forecast the future costing and evaluating the investors and lenders. This comes with a sound planning of the budgets and various resources deployment through this. For this the budgeting analysis is required.
Importance of Budgeting analysis is:
- The process of budgets preparation is to constructively bridge the communication gap as managers get in direct contact with the other staff.
- It helps as a shield to the potential problems.
- Helps in determining and evaluation of actual performance
- It is a roadmap for future growth
- Helps in estimation of costs of projects in a well-defined manner.
In the process of budgeting analysis, the accounting software can be used by companies which help in automation of budget process and helps in keeping the track of expenses electronically.
These software packages also gather or collect information from the company’s accounting department to create simpler process for managing and creating budgets. These are invaluable tool for managing financial information and reviewing information in a real time format.