Budgeting for your Business

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 forecast is a prediction of the future, whereas a budget is a planned outcome of the future that the business wants to achieve.

What is Business Budgeting?
Most of us do not really think much about it, but we are preparing a budget every time we estimate how much cash we are going to need for a particular purchase and how much money we will have left over at the end of the month after paying our bills. A budget is simply an estimate of what is going to happen in the future as far as our income and our expenditure is concerned.

Business Budgeting is a term often used to...

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