To introduce the concept of budgeting, we should start from the concept of strategic cost planning. When we speak of strategic cost planning, we are referring to a series of goals and expectations that the company should organize and know clearly to be able to pursue a development line which is coherent with the choices made. For a correct coordination and management of the available resources, it has to be taken into consideration the existing economic division of the different fields in which the company applies its own budget.
The budget has to be seen as an instrument of prevention, in order to pay more attention to company protection: a real investment to gain and produce more, in the continuation of business activities with significantly reduced problems.
The budget is an administrative document of preventive nature, in which the company formalizes the future management operations to realize its own goals. In it will be included the necessary activities to reach business goals, which obviously need to be clarified in advance. If these are not duly clarified, it will be very difficult to use budget to guide company management as a compass.
Usually, the budget allocated for the security plan is strictly bound to the type and quality of the services/products being offered. From this point of view, the budget becomes fundamental for corporate coordination and organization.
In conclusion, the fundamental points of budget are planning, control, and verification. Thanks to a timely study made in advance, it is possible to eliminate strategic uncertainties which might otherwise re-appear in the future, as well as intervene effectively on possible unexpected events.
The budget allocated for the global corporate control, entrusted to a single reference company, guarantees considerable savings as well as higher profits, without neglecting professionalism.