The following main arguments are usually given for budgeting or following are the main advantages of budgeting.
* Budgeting forces early consideration of basic polices.
* It requires an adequate and sound organizational structure, that is , there must be a definite assignment of responsibility for each function of the enterprise.
* Budgeting compels all the members of management, from the top to bottom to participate in the establishment of goals and plans.
* Budgeting compels departmental managers to make plans in harmony with the other departments and of the entire enterprise.
* Budgeting helps the management to put down in figures what is necessary for a satisfactory performance.
* Budgeting helps the management to plan for the most economical use of labor, material and capital.
* Budgeting tends to remove the cloud of uncertainty that exists in many organizations, especially among lower levels of management, relative to basic policies and objectives.
* Budgeting promotes an understanding among members of management of their co-workers' problems.
* Budgeting force management to give adequate attention to the effects of general business conditions.
* Budgeting aids in obtaining bank credit as banks commonly require a projection of future operations and cash flows to support loans.
* Budgeting checks progress towards the objectives of the enterprise.
* Budgeting rewards high performance and seeks to correct unfavorable performance.
* Budgeting forces management to consider expected future trends and conditions.
