A budget is quantity wise expression of a plan for a certain period of time. It includes revenues, costs, expenses and all other financial details. It is basically implemented for all major bodies and organizations. Proper planning of a budget is a prerequisite for any organization. A budget is meant to guide managers and directors of an organization in their activities.
Applications of budgets:
There are various budgets based on the organization it is prepared for. Some of them are:
Business startup budget: It is basically a budget meant to act as a guide for a new business that is taking off. Every possible expense for the starting of the business is included.
Corporate budget: A corporate budget usually pertains to companies. It is a short term plan which is generally drawn up for one year.
Event management budget: An event manager can use the help of such a budget to predict whether the hosting of a particular event will result in a profit, loss or break even.
Government budget: This type of a budget lists the basic incomes and expenditures for the government of a country or state for a period of time.
Family budget: A family budget would deal with all expenditures of a family. It is a very small but helpful way to run a family effectively.
A budget should be made in a way such that it provides for debt reduction help.
Types of budgets:
Sales budgets estimation of future sales.
Production budget estimation of units and their costs to be produced to meet sale demands.
Capital budget determines all long term investments of a company.
Cash flow budget a list of cash incomes/expenditures.
Project budget foreseeing of costs associated with a project of a company.
Revenue budget inflow of revenue for governments and the expenses for them.
Expenditure budget includes spending prices.
Marketing budget costs related to promotion/advertisement of products.
Help with budget planning (budgeting help):
If one requires budgeting help they always have access to a plethora of tools. There are budget calculators available in the internet that help sort out budgets properly. There are various websites too that offer their services at nominal prices which help one to draw up a good budget.
As we see a budget is of prime importance for any financial body. It helps a body to run effectively keeping in mind the structure. Planning a budget is highly important as it helps in bringing about savings which can be used for further investments. Overall it can be called the skeletal structure of finances.