| Advertisement |
Performance Budgeting provide a meaningful relationship between estimated inputs and expected outputs as an integral part of the budgeting system. ‘A performance budget is one which presents the purposes and objectives for which funds are required, the costs of the programmes proposed for achieving those objectives, and quantities data measuring the accomplishments and work performed under each programme.
Thus PB is a technique of presenting budgets for costs and revenues in terms of functions. Programmes and activities are correlating the physical and financial aspect of the individual items comprising the budget.
Traditional budgeting vs. Performance budgeting
1. The traditional budgeting (TB) gives more emphasis on the financial aspect than the physical aspects or performance. PB aims at establishing a relationship between the inputs and the outputs.
2. Traditional budgets are generally prepared with the main basis towards the objects or items of expenditure i.e. it highlights the items of expenditure, namely, salaries, stores and materials, rates rents and taxes and so on. In the PB latter the emphasis is more on the functions of the organisation, the programmes to discharge these function and the activities which will be involved in undertaking these programmes.
2. Traditional budgets are generally prepared with the main basis towards the objects or items of expenditure i.e. it highlights the items of expenditure, namely, salaries, stores and materials, rates rents and taxes and so on. In the PB latter the emphasis is more on the functions of the organisation, the programmes to discharge these function and the activities which will be involved in undertaking these programmes.
