A Study on Setting up an Operational Budgeting System in Service Organization

Budget is the most important planning tool for managing any organization. Budgeting as prediction of incomes and expenses for a period helps Manager to keep under control the financial health of the organization. The operational budgeting system with result-oriented purpose of this financial document tries to link budget allocations to the results of the organization actions to achieve savings, transparency, efficiency and effectiveness of budget. The aim of this study is explore the effect of diamond model factors on establishment of operational budget system and determine the impact of each of these factors. The diamond Model includes Factors as follows: planning management, cost management, performance management, change management, accountability system and motivation system. The research is a descriptive – survey type, in which questionnaire was used for data gathering and SPSS software was used for data analysis. Research findings suggest that six factors of diamond model have effect on the establishment of the operational budget with performance management, planning Management and cost management have the greatest impact respectively.