THE ROLE OF BUDGETING IN IMPROVING FINANCIAL PERFORMANCE OF SMALL BUSINESSES

Budgeting provides small businesses with a formal means of planning, controlling expenditure, managing cash flows and evaluating financial performance. The illustrative primary-data analysis suggests a positive relationship between budgeting effectiveness and perceived financial performance. The findings should not be taken as evidence from a real field survey until illustrative observations are replaced by real respondent data. However, the analysis shows how primary survey evidence can be organized and statistically assessed. Effective budgeting is most useful when it is realistic, regularly reviewed and  ed to day-to-day managerial decisions.

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