The budget as a financial management tool for business decision-making

Abstract

DOI: https://doi.org/10.46296/rc.v8i15.0340

This study focused on the lack of budget planning and supervision in companies, which causes economic inefficiencies, impacting strategic decision-making. This can lead to liquidity difficulties, decreased profitability and economic risk, restricting the competitiveness and sustainability of organizations in a changing and highly competitive economic environment. The purpose of this paper is to analyze the budget as an essential instrument in financial management and its impact on business decision-making. The methodology used was carried out in exploratory studies of a descriptive and qualitative nature. The analysis-synthesis method was applied, based on a theoretical review of the relevance of the budget in financial management, assessing its impact on the organization, supervision and improvement of resources. The most important source of information was used, which is the budget of a company. The main results show that the budget enables companies to organize, supervise and improve their resources, increasing profitability and decreasing economic risks. Furthermore, it simplifies strategic decision-making by offering precise data about the economic situation, thus favouring the long-term sustainability and expansion of the company. Therefore, it is concluded that the budget is a crucial instrument in financial administration, as it facilitates effective management of resources, optimising the planning and control of the company. Its use simplifies strategic decision-making, reduces economic risks and boosts profitability.

Keywords: Budget, financial management, decision-making, planning, business control.