Advantages of Imposed Budget

Advantages of Imposed Budget

The budgets are prepared by the senior Management and junior management is informed to achieve the targets. There is no effective involvement of junior management in decision making process.

1.    Time Saved

Because the decision making is in few hands therefore immediate decision can be made.

2.     Overall Direction

This technique helpful to achieve the overall direction of the organization as senior management set the overall direction and they prepare the budget keeping in mind the strategic objective.

3.    Lower Management Biased

Third advantage of imposed budget is that it can avoid the lower management biased toward budget preparation. When lower management is engaged budget preparation, they can influence the budget for self interest.

4.    More Control on resources

The fourth advantage of imposed budget is that it brings more control in the organization. Top management takes decision about the utilization of resources in the best interest of organization.

5.    Experience is important

The fifth advantage of imposed budget is preparation by the experienced managers. Budget preparation required a lot of depth knowledge and understating of business.