The Australian National Audit Office has identified the advantages of activity based budgeting: The Advantages - Output costs are supported by a schedule of costed activities - Opportunities to examine work processes - Identifies non value-adding activities that can be eliminated - Basis of a performance measurement system and direct link between strategic goals and operational realities - Enables cost profiles to be managed - Accurate costing data for operational management - Costs are transparent, understandable and actionable Disadvantages - Activity definition may become too detailed and the model may become too complex and difficult to maintain - Underestimation of the task of collecting activity driver data - Implementation may be considered a financial management fad and there is insufficient commitment from operational managers Activity Based Budgeting Disadvantages - Usually requires buying Activity Based Budgeting software - Requires training of all managers including budgeting department - Requires people to really understand what drives their budget - Eliminates excuse that activity volume changed because it makes visible volume changes - Requires everyone to collect or estimate activity volume By understanding how resources are transformed into products or services, and byfocusing on the cost of activities, activity based budgeting helps an organisation to obtain a greaterunderstanding of how costs behave in their organization and which activities create significant amounts of cost. Budgeting and forecasting scenarios can be integrated into your financial reports and extend their use for future cash flow projection, variance reporting, and return on investment. If an organization's sales volume is projected to increase significantly over a period of time, first and foremost it must be able to make a good budgeting and forecasting. After some period of time, participants become more comfortable with the process and work hard to improve the benefits of having one. There are different stages of the budgeting process: - plan - execute - review - report the ogranization's financing, investing and operating activities The planning stage Budgeting pertains especially to the planning stage. Instead of living a sedentary lifestyle, you work for your stomach and try not to spend much on leisure. It makes you love yourself more. You learn to prioritize yourself and your needs. If personal budgeting is handled the right way, then you may not become a selfish person. But if it is handled the wrong way, then there is a big possibility that you would think only of yourself and no one more. Consolidating debt into a low-interest loan could be a great solution for you. Or perhaps you just need a structured repayment plan. Maintain a cash cushion. Nothing is more stressful than losing your job or receiving an avalanche of unexpected bills. Maintaining a cash cushion in the bank -- typically enough to live on for at least three months -- can help you sleep easier at night. Using Budgeting Software for HighTech Financial Freedom Budgeting is the answer to your problems on financial matters. Living payday to payday, failure to eliminate debts and other financial problems are quite common. Fortunately, you can try a better way to manage your money with budgeting software.