Problems of the Budgeting System
The major problems in developing a budgeting system are:
- Getting the support and involvement of all levels of management.
- Developing meaningful forecasts and plans, especially the sales plan.
- Inducing all individuals to get involved in the budgeting process, and gaining their full participation.
- Establishing realistic objectives, procedures and standards of desired performance.
- Applying the budgeting systems in a flexible manner.
- Maintaining effective follow-up procedures, and adapting the budgeting system to changing circumstances.
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