Many people believe the budgeting process is wasteful and ineffective. They maintain that managers spend too much time focusing on budgeting mechanics and not enough on strategic issues. They believe that emphasis on the budgeting process causes managers to neglect more important matters, such as eliminating non value-adding activities that waste resources. Critics of the budgeting process also maintain that the information and formats that managers use in budgets fail to communicate the short-term business activities needed to achieve long-term goals.

Required:

In the capacity of a company's controller, explain the need for budgeting. Also suggest ways to make the budgeting process, the budget information and the budgets themselves efficient, effective and meaningful.