Planning Objectives And Objectives Of An Organization

1298 Words Feb 2nd, 2015 6 Pages
Planning
Before the preparation of any budgets or other budgeting related activities can be undertaken, one first needs to plan. Planning is defined as the process of stating the direction and financial objectives of an institution. Planning comprises of two main components, which include strategic and annual planning. The annual plan provides the high value targets, necessary for guiding the budget. The strategic plan comprises the overall long-term institutional goals and objectives, which are both qualitative and quantitative in nature. For the budgeting process to be successful, the relationship between planning, budgeting and forecasting must be taken into consideration. This starts with the formulation of a strategy, which involves the determination of what activities to engage in and also choosing the best choices that will yield high returns. Then planning steps in and tries to align the available resources to the undertaken strategy. It is here that the institution gets to know its financial direction and also what to expect. Budgeting shows how the overall plan is to be executed step by step, and specifying the expenditures. Through the use of the school’s historical data, forecasting helps the institution to adjust the plans and the budget in case of any changes that may come up in the future.
Budgeting
A budget is defined as a financial plan, quantified in monetary terms that is prepared and approved prior to a defined period of time. In other terms, it is a…
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