A priority of effective budget management is to take steps to ensure that businesses create a manageable and controllable budget and to prevent cash crunch situations from developing.

Capital budgeting is an essential part of every company's financial management. It involves examining investment assets and deciding whether or not those assets will achieve the company's desired returns over an extended period of time.

Working without a well thought-out operating budget can be compared to playing Pin the Tail on the Donkey.