Difference Between departmental budget and an organizational budget?

Today in this article we will talk about What is a departmental budget and an organizational budget? When we talk about a budget, we refer to a specific amount of money , which is needed in order to cover an economic expense in the company.

In a way, the budget provides guidance on the economic capabilities of a project, since it has a limited amount of money to meet the goals of the company .

A budget brings benefits to the business plan of a company , giving advantages in different areas. Some of these positive aspects are:

  1. The company is better managed under a budget, thanks to the fact that it has control of the company’s cats , being useful to calculate new budgets and have a record of how much was needed to do a project at a certain time.
  2. Having a budget limitation gives the advantage of making better use of resources , since it forces the use of intelligence to optimize resources in the project
  3. Finally, budgets help to better guide the goals that are had, since it identifies unnecessary expenses in the company , helping to focus more and more on the main objective of the project.

Since we have a contextualization of what a budget is and what benefits they have, we can delve into the topic of what is a departmental budget and an organizational budget? Next, we will explain each of these types of budgets.

What is an organizational budget?

The Organizational Budget is a type of budget, which encompasses an entire company . It has the elements of Surplus or deficit, which are gains and / or losses. This type of budget has a series of goals, the main one being to keep the company operational. This goal can vary when talking about non-profit organizations, since their objective is to have a positive cash flow.

An important part of the objectives set in a budget has been what is expected of it; although you want to increase sales or reduce company expenses. After the organizational budget is made based on real costs; a departmental budget will be sent , which we will discuss better soon in this article.

What is a departmental budget?

Unlike an organizational budget, a departmental budget as its name implies, is oriented towards a budget for each department of the company .

And is that each department is a business within the company; The costs that are managed are managed by this type of budget, in addition to the cash flow that the company has.

This type of budget has its objectives, which are different from the Organizational Budget because it has a different focus .

When the different departments of the company manage to fulfill their projects with less, making the money work and begin to give a benefit to the company, which is why the departmental budget has the main objectives of reducing the budget and avoiding .

Of those responsible for making a budget, there is the sales department , which in addition to giving a budget, also gives a sales budget, which is responsible for giving a sales forecast, gathering information on the trends that exist in the market and manage the plan that the sales department has .

On some occasions, there may be an excess of the budget , which can be caused by various errors; either by the work of the department manager; for not using the budget as a measure of the actions in the project or not taking it directly into account.

Although there are external factors that can modify a budget, you should try to calculate it in a way that is valid against possible economic changes.

We hope this article on What is a departmental budget and an organizational budget has been useful to you? where we mention each of these types of budgets. Knowing the benefits that this can bring to a company, making it more organized

 

by Abdullah Sam
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