During the execution phase of the budget, what is the importance of budget measurement?
There are four phases in the process of budgeting and each phase has an important budget measurement:
1. Budget preparation
2. Budget Approval
3. Budget Execution
4. Audit and Evaluation
For example, in the budget execution phase, it is performance measurement. It is about linking performance measures with budget (or resource) allocation.
e.g., safety performance measures – > allocation of budget to Safety programs; quality performance measures – > allocation of budget to Training Programs/Personal Development; effectiveness performance measures -> allocation of resources to Effectiveness Training, etc.; efficiency -> allocation of resources; and organizational excellence performance measures – > allocation to resources in hiring selection process, etc.). In other words, the information collected from various performance measures in the various organizational goal areas is used in the Budgeting Execution phase of the budgeting process.
a. Performance measurement …
During the execution phase of the budget, this solution discusses what is the importance of budget measurement. References are provided.