The financial budget is a way of quantifying the resources needed to achieve these objectives. Budgets are prepared by managers and other staff who are responsible for the activity concerned. Finance staff are a technical resource and ensure that the budgeting process is completed professionally. Budgeting requires those responsible to have good interpersonal skills. It is important to be able to listen carefully and negotiate when planning and monitoring a budget.
Regular statements identify the differences between budgeted and 'actual' figures.
This takes place towards the end of the budget cycle. It is also an opportunity to see if the budget process itself could be improved. Stages in planning a budget Identify organisational or project objectives Involve a range of staff in this process. Decide what is the 'limiting factor' The 'limiting factor' is what restricts the budget. It could be a lack of money, human or other resources or the ability to implement a programme.