A manager's responsibility is not to forecast the future, it is to contribute to its creation, and to do so means to be continuously mobilizing all resources in the organization to adapt to and exploit the opportunities that appear. Budgets and budgeting are processes and procedures that aim at contributing to such a mission. A budget is a statement, a declaration of actions intended to be carried out in a coordinated way by the various actors in an organization, whether for profit or not. A budget reflects answers to one key question: how are we going to go from where we are to where we want to be? A budget is one of the ways through which energies are mobilized and channelled for the successful implementation of the business strategic intent.

Budgets and budgeting processes have a variety of purposes, all of which must be pursued simultaneously. First, they offer a forum for coordinated decision making, including identifying and allocating the resources necessary to carry out the organization’s mission efficiently and effectively. Second, the promulgation of the budget communicates intent, plans and values, and can then be used to build commitment. Finally, budgets establish benchmarks for performance measures, provide a basis for variance analysis and assist in the management or performance improvement.

Almost all European businesses use some form of budget. Yet many managers are not fully satisfied with their budgeting system. New forms of budgeting are now emerging, and it seems likely that budgeting, like other business tools, will increasingly become subject to processes of continuous adaptation.