Financial planning
The group must work out a budget for all the operations to be undertaken and explain how the activities are to be financed. A budget is a statement about the allocation of money (income and expenditure) according to a set of priorities or a plan over a period. The advantages budget and budgeting systems are the following
- It ensures the plans and ultimately the objectives of the co-operative are realized;
- It provides a means to control expenditure and ensure corrective measures are in place if over-expenditure has occurred or is happening; everyone will know how money coming in will be spent;
- It assists with plan implementation;
- It helps to measure performance of the group
- It is also a motivational tool because it gives direction.