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Budgeting is essential in a company, especially managers use this to plan the future actions of the company, in this way formal plans can be executed. A concrete definition of budget is a formal statement of which plans in dollars, in this way strategic plans are implemented that cover short periods, eventually the reports are monthly, annual, or quarter of the year. That is to say that the budgeting process is the purpose to plan and achieve the objectives that are to be achieved (Wild & Shaw, 2021).

Benefits of budgeting:

Plan: The budget focuses on future opportunities and deals of the organization. This forces managers to plan.

Control: the function of control requires an evaluation of operations. This allows you to identify problems and thus take action to correct them.

Coordinate: Budgeting helps coordinate specific activities across all employees and departments and thus work forward with the company's vision.

Communicate: Written Budget maximizes communication in specific plans of all employees, this allows avoiding confusion among the group.

Motivate yourself: budgeting increases motivation, increases performance, which is positive in the organization (Wild & Shaw, 2021).

Example

Where I work, the accounting department oversees keeping track of the general expenses of the company. I am in the Supply Chain and Manufacturing department, which my function is to keep the inventory under control, for that we use a software called LN, this allows us to keep the inventory controlled, in addition to the fact that through it, sales can be recorded. to customers, purchases of raw material, among others. It is in this way that the accounting group uses this data to predict a better future for the company, so that they can organize plans to have the units that are going to be sold to customers, how much is estimated to be the profits and losses of the year, normally where I work, a report is made every quarter of the year, where all this information is presented to present it to the managers and owner of the company. This subject of managerial accounting will be very useful in my career, since I am interested in looking for an accounting position later, since this allows me to understand and manage money correctly, which is vital today on a personal level and business.