The main benefits or advantages of budgeting can be pointed out as follows:
1. Goal Achievement
Budgeting provides guidelines to achieve operational and financial goals of the organization.
2. Better Coordination
It helps to maintain better coordination by linking organizational objectives and available resources in order to achieve the goal.
3. Guidelines
Budgeting provides guidelines or road map for better performance.
4. Better Decision Making
Budgeting helps the management to take wise decisions by providing proper guidelines and direction.
5. Resource Utilization
It promotes proper utilization of resources (material, labor and capital) to increase productivity and profitability.
6. Motivation
It motivates the management and employees which leads to better performance and job satisfaction.
8. Improve Communication
7. Performance Evaluation
It helps to evaluate the performance of different units, departments and employees in the organization.
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It helps to maintain better communication between the management and the subordinates.
9. Increase Efficiency
Because of motivation, coordination and better decision making, it helps to increase efficiency of the organizational activities.
10. Corrective Action
It regularly monitors the progress of organizational activities and provide tool for corrective action when needed.
