Budgeting Theory

Budgeting theory refers to the principles and practices used to plan and control financial resources within an organization. It involves setting financial goals, estimating future income and expenses, and creating a plan to allocate funds effectively. Different budgeting approaches, such as incremental or zero-based budgeting, help organizations prioritize spending based on strategic objectives. Ultimately, budgeting helps ensure that resources are used efficiently and align with the organization’s goals, enabling better decision-making and financial stability. By providing a clear roadmap, budgeting can improve accountability and transparency in managing finances.