Plan - Budgeting

What is a Budget?
A budget is a plan to:

1. Ensure you have enough money for activities in the future.
2. To control and monitor all the finances of the business, including its income and expenses.
3. To enable information to be extracted so the business can make decisions as to direction and growth.

The budget enables the owner of the business to rely on accurate figures that would otherwise have been based around guesswork alone. At any time, the owner should not confuse a budget with a forecast.

A Budget is not a Forecast
A forecast is a prediction of the future, whereas a budget is a planned outcome of the future that the business wants to achieve.

A budget is basically the plan of your business shown in money terms because it estimates your sales, purchases and your other business expenses, including drawings you take for yourself for the next 12 months. It is designed to force you to work as close to your budget as possible, so that if unexpected costs arise, then...