Budgeting

Why prepare a budget

Budget is a financial document used to prepare or projected the future incomes and expenses. Budget is preparing May b a individual or a company. Every business and every household family need budgeting. Even very small businesses also need budgeting for their best future and their goodwill. So the budgeting has a lot of importance in every field of life. However the budgeting produces flexibility to availability of credit and multiple ways to paying for things. Budgeting make it business successful because every moment of business done according to budget plan. Every time business has a clear picture and don’t run on loose track.

For preparing a monthly budget of a business must b include all sources of monthly income including sales, detail of all fixed expenses and list of all variable expenses.

Budget shows clear and accurate picture of all expenses to spend in a month as well as helps the business to stay in control. Through that information the business man reduced the any type of stress on the business. Budget shows the priority areas to b done first and makes it able to discussion. When the business capture the priority areas in time and make it business more profitable.

Budget helps us for saving because every business done expenses only according to their budget plan. No cross the required limit. 

Budget helps the business to achieve his goals. When goals are achieved it means business is running to maturity stage. The most important Budget helps to the preparation of financial statements. Financial statements show the financial position of the business. Budget clear the need how they would like to spend money according to their need purchase has been done. Budget clear to business his position, for need of credit required or not if business has need for credit than clear how many.

The budget creation process has same direction for both individual budget or personal budget and budget preparing for a business. First of all must b clear the income sources and his expenditure, this is compulsory for both personal budget and business budget.

The five reasons to prepare a budget.

1)      What you scaling or measure, you can improve?

2)      Very helpful in decision making.

3)      Strategy in savings. How to budget in Savings?

4)      Helps your plan.

  5) Makes and keeps you honest.