Budgeting provides information that can be used to support a variety of management tasks. Budgeting:
1. Helps the manager select the best crop and livestock enterprise combinations.
2. Can be used to refine organizational and operating structures. It also forces a manager to develop a production and marketing plan.
3. Forces the manager to uncover cost items that might otherwise be overlooked.
4. Allows the possible outcomes of a change to be studied before resources are actually committed to the change.
5. Can be used to test the economic and financial feasibility of alternative production technologies and management practices.
6. Can be used to develop and organize information that will be useful to lending agencies when the business needs operating, intermediate, or long-term loans
7. Can help the manager select among investments, when credit is limited, by estimating both the profits and the impacts on cash flow of each investment.
8. Provides information that the manager can use to compare the projected and actual results of implementing a plan.