Internal Budgeting

Synonyms

Forecasting financial statement

Definition

The internal budgeting is the process leading to the preparation, prior to a definitive period of time, of a financial and quantitative statement of an organization’s activities that shows the expected financial performance, financial position, and cash flows disaggregated by area of responsibility. The resulting document provides managers and policy makers with financial information to assist them in taking strategic decisions for which they are responsible.

Introduction

The internal budgeting is often intended just as the simple process leading to the creation of a forecast balance sheet, but is something more complex and articulated. The internal budgeting is a key component of managing resources effectively and efficiently. It could be viewed as an effective tool for controlling activity and monitoring and managing financial performance as well as achieving required results.

As for the private sector, the public sector...