A budget is an estimation of revenue and expenses over a specified future period of time and is utilized by governments, businesses, and individuals. It is a financial plan for a defined period, normally a year. It greatly enhances the success of any undertaking. As the saying goes, “if you fail to plan then plan to fail.”
Corporate budgets are essential for operating at peak efficiency. Aside from earmarking resources, a budget can also aid in setting goals, measuring outcomes and planning for contingencies.
The process begins by establishing assumptions for the upcoming budget period. These assumptions are related to projected sales trends, cost trends and the overall economic outlook of the market, industry or sector. The budget is published in a packet that outlines the standards and procedures used to develop it, including the assumptions about the markets, key relationships with vendors that provide discounts, and explanations of how certain calculations were made.
RJV, with its team of expert, can help the company to develop and monitoring a budget. The development of the budget can be a onetime task, however continuous monitoring , improvisation and comparison with the actual makes the budgeting tool more effective and helpful to the management in taking decisions and corrective action.