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Five Common Misconceptions
No. 4: Budgeting Is Just Accounting By Another Name
One thing budgeting and accounting have in common is that both are expressions of an organizations activities in financial terms. Here is where the similarity ends:
|Purpose||External reporting||Internal management|
|Applications availability||Many||Few (many emerging)|
Both accounting and budgeting provide important information about an organization; but, they do not provide the same information and do not serve the same purposes. When properly conducted, budgeting can help to:
These are benefits that accounting information is not designed to provide.
What Every Manager Needs To Know About Budgeting, Lesson 5 of 14