Relevance of Budgeting in the Business - Essay Example

One is hence not accountable for the spending of the business. There is also a problem in which one is not in a position to draw up a clear investment plan with limited finances. All these problems emanate from the failure to have a tool where one can account for daily expenditures and income. The end solution, therefore, is to invent a tool that facilitates the evaluation of the financial inputs and outputs incurred daily.

To gather the information, academic journals were analyzed. Data collection did entail the utilization of a cross-sectional survey, using the questionnaires. Information was also the journals tend to explain some of the challenges and drawbacks that a person may face while budgeting. They also give a clear guidelines on the steps to draw an effective budget. Theoretical studies did indicate that the business is subject to undergoing various steps in its operational life. All the steps have different financial demands and unless budgeting is done effectively, it is prone to failure. Personal expenses also stand a gap in the success of a business. Therefore, budgeting expenses is equally important.

In conclusion, the business budgeting process encounters immense problems and challenges but the businessperson has to foresee proactively these challenges to emerge successful in business management.