Week 5 Budget vs. Budgeting

Budget vs. Budgeting

As you know, this week we turn our attention away from financial statements and focus on budgets and budgeting. The following are their formal definitions.

Budget	Budgeting
A budget is a formal written statement of management’s plans for the future expressed in financial terms.	Budgeting is the process used to develop an organization’s budgets. It is an integral part of planning.

It is important to note that "budgets" assist management to:

• control finances
• meet current commitments
• provide funding for future ventures, and
• make financial decisions and meet organizational goals.

On the next page we will be discussing the budgeting process.