Do you have any idea about budget in your mind? Do you know why it is used? Are you familiar with its different categories? These all questions are very important to be answered.
By reading this article, you can get answers of above questions in a concise way.
It is a list of all intended costs and incomes to estimate savings and spending.
It endows with an estimate of revenues and expenditures by constructing a model of how a business might perform financially.
It also enables actual financial operations of business to be measured against forecast.
It plays very important role in all fields of our lives.
All of our expenditures highly depend upon budget.
Every matter of our lives can go smoothly only if our budget is well planned and maintained.
It is not only important for businesses but it plays same role for personnel so its planning is crucial at all levels.
Budget planning is very essential as we are required to maintain our budget while arranging different parties as well as different events.
Format of planning for your budget at business level can be followed by Budget Planning Template.
This will be very beneficial for you in order to provide you proper guideline about planning of a successful budget.
Aside from budget planning, there are different categories of budget.
These are: • Sales / Revenue • Profit • Cash Flow • Financial Position • Production • Purchase • Expenditure • Cash • Master • Zero Base • Flexible • National • Company • Personal • Corporate • Government • Business Set Up • Partial Budgeting • Capital Budgeting • Performance Based Budgeting • Incremental Budgeting All above described types play very important role in their relevant fields and purposes.
To prepare it with proper planning, a budgeting process is followed.
This process involves some basic steps: • Classifying expenditures • Determining different resources of income • Preparing budget • Laying down budget procedure • Allocation of income for expenditures • Observing effectiveness