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e right high-value opportunities.” He recommends creating an all-in-one process in which the CEO takes the lead in setting the strategic planning goals for all units, reviewing alternative strategies with business units, and linking resources to delivery of the alternatives with the highest value and best performance. Clarke (2002).

When you’re clear on your strategic goals and have a process that integrates strategic planning with resource allocation and performance management, budgeting can actually work. It becomes a mechanism for ensuring not only that funds flow first to the strongest opportunities, but also that those opportunities actually deliver on their promise, Clarke (2002) concluded.

Conclusion

Budgeting is an integral part of business planning process. Successful companies plan for their futures through the discipline of preparing an annual business plan, stipulating their financial and qualitative goals and strategies. Budgeting is an integral part of that plan.

Budgeting enables organisations to manage financial situations and act as a guideline to management of expenditures. Budgeting also provide organisations with records of all monetary transactions and forming the basis of filling system to financial statements.

As businesses grow, the amount of control that a business owner has on their business reduces significantly. It is therefore important that one remains in control of the business by budgeting to increase profits and performance. Consequently, budgeting allows you to think ahead to control the management of your business. As you will see, budgeting is based largely on the objectives of the business.

I have a very strong opinion that budgeting should not be scrapped, rather be modified to meet the current business environment. Organisations would have to restructure compensation programs so that managers no longer have an incentive to favour short-term goals over the longer-term. Budgeting will have to be flexible to be able to be adjusted from time to time to reflect changes in organisational goals and the economic environment.

Again, accounting department should be responsible for compiling only budgeting information; they should not determine the budgeting process. Management, through the planning process should determine the budget, and all departments should be included in the process.
Finally, budgeting is often considered as time taking, with lot of numbers, rules and unnecessary documents. Yet preparing an accurate budget is critical to the fiscal health of any successful organisation.

Bibliography
BRUNS, W. J., 2005. Accounting for Managers: Text and Cases. 3rd ed. Boston: Harvard Business School.
CLARKE, P. J., 2002. Accounting Information for Managers.2nd ed. Dublin: Oak Tree Press.
FISHER, D., 2005. Instructor's Manual for Budgeting and Budgetary Control. Greenwich School of Management.
GLAUTIER, M.W.E. AND UNDERDOWN, B., 2001. Accounting: Theory and Practice. 7th ed. Harlow, England: Pearson Education.
HOPE, J. AND FRASER, R., 2004. Beyond Budgeting: How Managers can Break Free From the Annual Performance Trap. Boston: Harvard Business School.