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Briefly explain any five utilities of a budget.

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Utilities of a budget are: 

1. Operationalise plans: Budget makes business plans operational. They serve as a means of implementary different plans, goals of an organisation and its basic plans cannot be concerted into performance without budgets and other operational plans. 

2. Higher efficiency: Budget bring efficiency and economy in the working of a business firm. They help management in obtaining the most profitable combination of different factors of production. 

3. Sense of responsibility: Budget puts a sense of responsibility on the shoulders of management. Budget motivates them to act responsibly and escape from extravagance. 

4. Source of motivation: The projected cost cuts results into the profit expansion. This acts as the motivation and leads an enterprise to stick to the budget. 

5. Co-ordination: The various budgets made in the organisation are to be coordinated and should follow the same objectives. Hence it makes co-ordination mandatory. 

6. Delegation of authority: The budget is prepared by the management but the responsibility to carry on the budget is vested to the respective department. Thus the budget helps to delegate the authority and fix the responsibility. 

7. Effective control: Management keeps effective control and help the various departments in the organisation to keep an effective control and check on extravagance. 

8. Sound planning: The good budget helps to have sound planning. This is also necessary for the organisation to have a sound planning structure. (any five)

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