Given the answer below , kindly elaborate please.

1. Explain how effective budgeting can improve the financial and operational performance of small and medium enterprise in the Philippines.

Budget plays very important role in improving the operational as well as financial performance of the company because budget is used as a monitoring and controlling tool. It enables the small and medium businesses in meeting their goals by making confident decisions regarding planning, and control. The budgeting helps the SMEs in estimating revenues of the business, it restricts extra expenditure of the business by planning expenses accordingly.

2. Site the factors that influence the success and failure of organizational budget.

There are various factors which determines the success and the failure of organizational budget. The factors which makes the budget successful are flexibility, realistic targets, achievable goals, effective planning, and clear communication. One of the most common and significant factor which makes the budget failure is unrealistic targets, setting goals which are very hard to achieve makes the organizational budget failure. Other factors of failure are lack of communication, commitment, and emergency planning and the following:

• Size of Available Funds. ...
• Long-term Business Goals. ...
• National and International Events. ...
• Legislative Factors of Budget Preparation. ...
• Industry and Competitor Analysis. ...
• Project Return on Investment.

3. List the advantages and disadvantages of Budgets.

The advantages of the budget are:

It helps the businesses in keeping their expenditure under control.

It determines the spending habits of the business i.e. it helps in identifying the areas or head which are very costly.

it also determines the value adding activities and non-value adding activities of the business such as it determines the wasteful expenditure with the helps of variance analysis .

It also provides basis to assess and analyze progress and performance.

The disadvantages of the budgeting are:

It is sometimes very costly and time consuming exercise for certain business.

It often create budgetary conflicts among departments.

It is often based on unrealistic assumptions, which hampers the growth of the business.

It results in budgetary slacks.

4. Explain what are Bottom-up and Top-down budgeting

The bottom-up budgeting is the process in which the inputs from the operational employees has been taken while making the total budget, and it is approved by the senior management.

The top-down budgeting is the budgeting process in which activities and tasks are assigned by the senior management to the employees. It is traditional way of making budgets.