The budget is a realistic plan for the future expressed in quantitative terms. The budget serves as planning, control, coordination, evaluation tool, etc. Budgets of individual departments are formed into one organizational budget. Thus, one of the primary advantages of budgeting is that it requires departmental managers to make plans in conjunction with the plans of other interdependent departments, thus promoting coordination and communication among organization units and activities.
It is true that the profit plan is based on estimates. However, this is neither an advantage nor a disadvantage of budgeting.
It is true that budgeting does not take the place of management and administration. However, this is neither an advantage nor a disadvantage of budgeting.
It is true that the budget should be adapted to fit changing circumstances (though not continually -- only when needed). However, this is neither an advantage nor a disadvantage of budgeting.
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