What are the use of cash budgeting procedures?

Budgeting procedures differ from Company to Company. However all budgeting procedures have the same objective, that is to ensure a smooth process of preparing budgets.

A typical budgeting procedure always starts from the top management. In the process, the top management will issues the budget forms and deadlines to various units or departments of a Company.

Each unit or department will have a head. The heads will then distribute the budget forms to his subordinates to complete the detailed information. Upon completion, the heads will collect all the budget forms from their respective subordinates and review them before passing to the Finance Unit.

The Finance unit acts as the overall budget preparing coordinator. They compile all the various departmental budget forms into a Master Budget. The master budget is then check for reasonableness and accuracy. Any errors found will be communicated to the respective head who will then rectify them immediately.

Once the master budget is finalized, it will be passed to the top management for their reviews.