Which of the following is NOT a purpose of budgeting?

The purpose of budgeting encompasses several key functions that aid in financial planning and performance evaluation, but documenting employee actions does not fall under these primary purposes.

Budgets are primarily utilized to predict cash flows, which helps organizations anticipate their financial needs and manage their resources effectively. They also provide a benchmark for comparing actual performance against planned financial goals, assisting in evaluating the success of various departments or the company as a whole. Furthermore, budgets are instrumental in identifying areas where remedial actions may be needed, allowing management to address variances and ensure financial stability.

In contrast, documenting employee actions tends to fall under human resource management and performance management rather than being a fundamental objective of budgeting itself. While budgets can indirectly influence employee actions by setting financial targets, the act of documenting those actions is not a direct purpose of the budgeting process.