An approval budget is a predefined estimate of the total cost a business entity is willing to accept in order to complete a particular undertaking or activity. It’s a key element in financial planning, as it helps to ensure that all resources available are used efficiently and optimally. Approval budgets also provide a means for managing the overall costs associated with any specific project or endeavor, ensuring that the total expenditures do not exceed the predetermined limit. By establishing an approval budget upfront, businesses can plan better and have better control over their resources.