The budget is a type of list that clearly defines a business or a person profit and loss. It is useful for managing expenditure and saving money an individual or a business. Many people are using a budget for short-term goals, like a vacation or a business forecast, while others can write budgets for spending plans and long-term savings.
The budget has the following roles:
- Financial planning in terms of activities. Each activity requires resources and it aims to identify all needs in terms of material;
- Contribute to the financial profitability of the business;
- It helps in making decisions regarding the activity;
- Shows a picture of all resources used;
- Helps you realize a financial analysis to see if the work has reached its goal financially or not.
No planning …show more content…
This is achieved through periodic review (annual) expenditure on the basis of their marginal analysis done, from the smallest decisions (office), hierarchically to the highest. It is assumed that there is no budget available for the current year and so are developed alternatives for each program financed.
It is useful because it assumes that only projects that are efficient (cost / benefits) survive. On the other hand, documentation requires effort, so higher costs.
Activity-based budgeting (ABB) aims to manage costs more effectively by authorizing the supply of only those resources that are needed to perform activities required meeting the budgeted production and sales volume.
Conclusion
Without a budget you can not think to a business.
Depending on the type of budget, we should take into count certain indicators, but things are essentially trivial. In other words, to know where to find and especially where we want to go with our business is more than necessary to know the resources we consume and estimate the revenues which we will
The budget has the following roles:
- Financial planning in terms of activities. Each activity requires resources and it aims to identify all needs in terms of material;
- Contribute to the financial profitability of the business;
- It helps in making decisions regarding the activity;
- Shows a picture of all resources used;
- Helps you realize a financial analysis to see if the work has reached its goal financially or not.
No planning …show more content…
This is achieved through periodic review (annual) expenditure on the basis of their marginal analysis done, from the smallest decisions (office), hierarchically to the highest. It is assumed that there is no budget available for the current year and so are developed alternatives for each program financed.
It is useful because it assumes that only projects that are efficient (cost / benefits) survive. On the other hand, documentation requires effort, so higher costs.
Activity-based budgeting (ABB) aims to manage costs more effectively by authorizing the supply of only those resources that are needed to perform activities required meeting the budgeted production and sales volume.
Conclusion
Without a budget you can not think to a business.
Depending on the type of budget, we should take into count certain indicators, but things are essentially trivial. In other words, to know where to find and especially where we want to go with our business is more than necessary to know the resources we consume and estimate the revenues which we will