The Plan Of An Old French Word Budget Essay

2553 Words11 Pages
The word “budget” is derived from an old French word “bougette”, which has the meaning of that of purse (The Guardian, 2004). It is also defined as “the quantitative expression of a plan of action and an aid to the coordination and implementation of the plan” (Bhimani et al., 2013). These days, budget is essentially used in almost every organization as an aid of measurements when setting the organization’s objectives and targets. Its use has allowed managers to bring about the objectives of the business in quantitative terms, usually on an annual basis, with a financial means of expression. Budgetary control on the other hand, is narrated as “a system of management control in which actual income and spending are compared with planned income and spending, so that you can see if plans are being followed and if those plans need to be changed in order to make a profit” (Financial Times Lexicon, 2015) and has in recent times played a greater role in performance management. At the same time, relationship between corporations and the capital market is on a rise, and has since resulted in many complications. This essay aims to identify and describe the merits of budgetary control, and at the same time, analyses the shortcomings in relation to the capital market.

An organization is a combination of many divisions covering a wide range of functions and activities. Budget helps to translate an organization’s strategic plan into operations by providing direction, coordination and

More about The Plan Of An Old French Word Budget Essay

Get Access