Budget managements' primary goal is to meet the public needs and interests of citizens. It is implemented at all governmental levels in accordance with organizational structure and territorial organization of the Republic of Croatia. The success of achieving budgetary goals depends on the efficiency and effectiveness of budget functions that we consider altruistic, while society is required to make some sacrifices and the public interest must be above private interest. This paperwork theoretically observes the importance, functioning and financing of the budget system, its legal framework and the dependence of stakeholders throughout all phases of the budget cycle. Emphasis is placed on budget accounting as a management system whose purpose is the support of public management. The product of budget accounting is adequate information essential for internal and external reporting, custom developed and represent an important basis for making business decisions. The development of budget processes and their modernization leads to the improvement of the public financial management system. The complex requirements of the official statistics holders of the Republic of Croatia and the European Union have resulted with the digitalization of budget processes and the establishment of a new application for Financial Reporting in the Budget System and the Register of Budget and Extrabudgetary Users (RKPFI). Higher quality and faster financial reporting build a transparent, accountable, and efficient budget system, which contributes to the socio-economic development of the country and represent the precondition for a better life quality.