A Line Item Budget Is The Most Simplistic And Common Budgeting System Used By Organizations

A Line Item Budget Is The Most Simplistic And Common Budgeting System Used By Organizations

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A line item budget is often referred to as the most simplistic and common budgeting system used by organizations. A line item budget is a budget that contains line items of expenditures for analysis, authorization, and control. A line item budget usually contain expenditures such as office supplies, salaries, travel and utilities (Mckinney,2015). Line item budgeting is designed to simplify an organizations spending. It shortens the budgetary planning process because it is builds upon the organizations preceding fiscal budget. With line item budgeting, the organization creates an estimated budget by basing it on the organizations previous activities and spending habits. Furthermore, line item budgeting became a common form of budgeting after economic reforms created new procedures in order to horde off corruption within governmental organizations, and to ensure those organizations were making legitimate expenditures (Mckinney,2015). It is a common form of budgeting because it is so simplistic in nature. In fact, due to its uncomplicated process, the general populous often use it for their personal household budgeting.
Line item budgets are easy to prepare, which makes it a familiar process for the administrator. Line itemizing allow organizations to justify the allocation of their funds. However, this form of budgeting works best if there has been consistent patterns established within the organizations functionality. There may be times that a leading administrators will approve of unusual expenditures (Joseph, n.d). Additionally, line item budgets reduces disputes between departments because it creates a uniform control throughout the organization. Most importantly, it makes it possible for organizations to make quick adjustments...

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... of miscellaneous expenditures. If Street Grace utilizes this form of budgeting it could cut many costs for the organization. For example, if we begin to track what type of paper the fliers are being printed on and tracking the effectiveness of paper posters compared to mobile alerts, we may be able to phase out paper publications and become all digital. This would be impactful and resourceful because of the age of technology we are living in and reducing our carbon footprint. In addition, line item budgeting usually leads to quick depletion on the organization funds because spends does not have to be detailed. Line item budgeting encourages a lackadaisical approach to budgeting. However, zero-base budgeting promotes planning, teamwork, and persistence. In short, zero-base budgeting will allow the organization to cut spending and to increase successful productivity.

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