Unit 2 P6 (PART 2)
FOR NOTES AND GUIDLINE PURPOSES ONLY, COPYING THE
WHOLE DOCUMENT WILL BE COPYWRITE.
USE SENSIBLE.
Budget definition: Business budgeting is one of the most powerful
financial tools available to any small-business owner. Put simply,
maintaining a good short- and long-range financial plan enables you to
control your cash flow instead of having it control you. The most effective
financial budget includes both a short-range, month-to-month plan for at
least one calendar year and a long-range, quarter-to-quarter plan you use
for financial statement reporting. It should be prepared during the two
months preceding the fiscal year-end to allow ample time for sufficient
information-gathering. The long-range plan should cover a period of at
least three years (some go up to five years) on a quarterly basis, or even
an annual basis. The long-term budget should be updated when the short-
range plan is prepared.
Reference: http://www.entrepreneur.com/encyclopedia/budgeting
Different types of budgets
Zero budgeting: Zero budgeting is a method that allows you to prepare
cash flow budgets and operating plans. Which every year has to be has to
start from scratch without any pre authorized funds. Zero budgeting allows
an efficient basis for resource allocation. Contrasting to other budgeting
methods that jus past sales. With Zero budgeting it is a necessity that all
the things that are happening needs to be right, for e.g. they’d need to be
benefit analysis and that there is no balance being carried forward.
Allocated budgeting: The allocation of budgeting is what allows a
business to run fluently. If the allocation fails then things like shortage of
equipment would have to run low or even worse staff members can get
made redundant. This could happen when the business didn’t make what
they intended to make in the annual year, or the financial plan could of
failed and too much anticipated income gets put into the wrong
departments.
FOR NOTES AND GUIDLINE PURPOSES ONLY, COPYING THE
WHOLE DOCUMENT WILL BE COPYWRITE.
USE SENSIBLE.
Budget definition: Business budgeting is one of the most powerful
financial tools available to any small-business owner. Put simply,
maintaining a good short- and long-range financial plan enables you to
control your cash flow instead of having it control you. The most effective
financial budget includes both a short-range, month-to-month plan for at
least one calendar year and a long-range, quarter-to-quarter plan you use
for financial statement reporting. It should be prepared during the two
months preceding the fiscal year-end to allow ample time for sufficient
information-gathering. The long-range plan should cover a period of at
least three years (some go up to five years) on a quarterly basis, or even
an annual basis. The long-term budget should be updated when the short-
range plan is prepared.
Reference: http://www.entrepreneur.com/encyclopedia/budgeting
Different types of budgets
Zero budgeting: Zero budgeting is a method that allows you to prepare
cash flow budgets and operating plans. Which every year has to be has to
start from scratch without any pre authorized funds. Zero budgeting allows
an efficient basis for resource allocation. Contrasting to other budgeting
methods that jus past sales. With Zero budgeting it is a necessity that all
the things that are happening needs to be right, for e.g. they’d need to be
benefit analysis and that there is no balance being carried forward.
Allocated budgeting: The allocation of budgeting is what allows a
business to run fluently. If the allocation fails then things like shortage of
equipment would have to run low or even worse staff members can get
made redundant. This could happen when the business didn’t make what
they intended to make in the annual year, or the financial plan could of
failed and too much anticipated income gets put into the wrong
departments.
