Business control system based on the establishment of annual operating budgets for all profit and cost centers of the company, periodically checking how the reality of the company’s performance matches these budgets, and analyzing the deviations produced in order to understand and correct the causes. A budget is a systematic summary of projections, which are initially mandatory, of projected expenses and estimated revenues to cover those expenses. It is prepared at regular intervals, which usually coincide with calendar years, and allows for short-term planning, goal setting, and management control by calculating deviations between actual and budgeted results. Annual budgets are the means of business action that allow economic decisions contained in an organization’s plans and programs to take shape in economic terms. If a company does not have a complete planning process, the budget constitutes (or should constitute) the moment of advance reflection for the coming year, becoming the document that reflects the estimation expressed in quantities and valued in monetary units of the economic-financial activity intended by the company and approved by management.
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