Budgets and Different Types

Do you have any idea about the budget in your mind? Do you know why it is used? Are you familiar with its different categories? These all questions are fundamental to be answered. By reading this piece, you can get answers to the above questions concisely.

Budget is a list of all intended costs and incomes to measure savings and spending. The budget provides with an estimate of revenues and expenditures by forming a model of how a business might do financially. The budget also allows actual financial operations of the business to be included against forecast.

Budget plays a notable role in all fields of our lives. All of our expenditures deeply depend upon budget. Every matter of our lives can go evenly only if our budget is well engineered and maintained. Budget is not just critical for businesses, but it plays the same role for personnel, so its planning is crucial at all levels. Budget planning is very imperative as we are required to maintain our budget while preparing different parties as well as multiple events. The format of engineering for your budget at a business level can be followed by Budget Planning Template. This will be very propitious for you to provide you with a decent guideline about the planning of a successful budget.

Aside from budget planning, there are many categories of the budget. These are:

  1. Sales / Revenue Budget
  2. Cash Flow Budget
  3. Profit Budget
  4. Financial Position Budget
  5. Purchase Budget
  6. Production Budget
  7. Cash Budget
  8. Expenditure Budgets
  9. Flexible Budget
  10. Master Budget
  11. Zero Base Budgets
  12. Personal Budget
  13. National Budget
  14. Company Budget
  15. Business Set Up Budget
  16. Corporate Budget
  17. Government Budget
  18. Performance-Based Budgeting
  19. Partial Budgeting
  20. Capital Budgeting
  21. Incremental Budgeting
All above-described budgets play a very important role in their relevant fields and purposes. To prepare well-planned budgets, a budgeting process is followed. 

This process involves some basic steps:

  • Classifying expenditures.
  • Preparing a budget.
  • Determining different resources of income.
  • Allocation of income for expenditures
  • Laying down budget procedure
  • Observing the effectiveness of budget

Post a Comment