Even the most advanced and accurate budget cannot prevent unauthorized expenditures. This is controlled through management oversight, rather than the budgeting process.
Budgets provide performance information, in that management can analyze what they thought would happen vs. what actually happened. From that point they can determine what factors were within their control and what was outside of their control and use this information for future budgets and operational decisions.
Throughout the budget process the various departments within an organization will meet to plan for the next year. These meetings will foster cooperation, communication and familiarity which will carry over after budgeting season.
Forcing management to focus on the future and make appropriate plans for the organization's success is a significant advantage of the use of budgets.
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