The budget manual communicates throughout the company the policies and
procedures for budget preparation. It is the activities and rules to be followed in
preparing a budget. It tells how the budget should be used by managers and who is
responsible for the different aspects of the budgeting process including preparation,
presentation, reporting, evaluation, and approval. It should list positions rather than
names to avoid unnecessary updating. A preparation chart would be helpful. It provides
the budgeting steps and aids in cooperation and coordination. The procedures to be
followed to revise the budget based on changing conditions and goals should be
specified. For example, revisions may be needed because of changing objectives, new
methods, changing economic environment, and errors. The budget manual should
receive participation from all affected managerial levels.