Essay: Important things to be Considered While Budgeting
Among the most crucial thing to be considered while budgeting is the organization structure. The organizational structure defines the number of the departments and the complexity each department. The management must clearly state the most important department that needs a lot of funding to the department needing the least funds. Additionally, each department should be allowed funds that must be accounted for (Tracy 205-209.
The financial manager must consider the budget for each department before allocating funds. It is also important for the overall financial manager to give each department the range of the funds that are likely to be available for disposal. The person responsible for preparing the department budget must work along with the department supervisors to guarantee that all the expenditures are covered. All the sections in each department need to be considered (Tracy 205-223).
After each department prepare is budget, the department head of the department finance officer must present the budget to the financial manger along with other managers to elaborate the justification for their budget. It is important to justify for each department budget because the resources in every organization are scarce and need to employed optimally. A budget must also have a specified time, for most organizations, the budget runs for a year or six months.
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