EFFECTS OF BUDGET POLICY ON THE FINANCIAL PERFORMANCE OF A FIRM

Abstract

A company's budgeting approach has a big impact on how financially successful it is. Given that the majority of businesses want to increase their profitability, a number of procedures and frameworks are established to guarantee that a business expands successfully. Therefore, budgeting policies give supervisors relevant data to assess business performance and guide cash distribution plans across different divisions within an organization. This review research set out to ascertain how budget policies affect a company's financial performance. To achieve the intended objectives, a total of 19 previous published articles that related to the effects of budget policy on the financial performance were selected by defining the inclusion and exclusion criteria. The articles were selected by searching on different databases. The articles that have full text accessed and are in English were included in the literature review. The study's conclusions showed that a firm's financial performance is significantly improved by budget policy. A comprehensive and documented budgeting policy improve the firm returns in the form of valuable revenue.