CFO Techniques: A Hands-On Guide to Keeping Your Business Solvent and Successful

Budgeting as a Control Mechanism

Budgets have always been essential for any effective internal control system. Governments, nonprofits, and many for-profit organizations place budgets among most significant policy documents. Historically, as industrialization fueled the expansion of economic structures and the growth of individual entities, executive management, whether bureaucratic officials or private entrepreneurs, looked for ways to plan revenues and expenses in advance. If you think about it, the entire system of centrally planned economies employed by socialist countries was nothing more than a state-controlled multiyear budget. The origin ...