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Type of Budget - Coggle Diagram
Type of Budget
Purpose of budgeting
Allocating resources
Controlling profit and operations
Facilitating communication and coordination
Evaluating performance and providing incentives
Planning
Type of budget
Activity-based Budgeting
benefit
linking of costs to outputs
clearer linking of costs with staff responsibilities
better identification of resource needs
identification of budgetary slack
ability to set more realistic budget
Rolling Budgets
Zero-based Budgeting
Drawbacks
too introspective
it does not help
very expensive
Incremental Budgeting
Benefit
less conflict
impact of change can be seen quickly
Easy to understand
less preparation time leads to lower preparation costs
Easy to prepare
Beyond Budgeting
Benefit
empowers operational managers
established customer-orientated teams that are accountable for profitable customer outcomes
develops performance responsibilities to operational management
creates transparent and open information system
motivates people by giving challenges, responsibilities and clear values as guidelines
create and fosters a performance climate baaed on competitive success