Ch. 01:

Ch. 01:
Businesses Budgeting Basics

Synopsis

In determining the total revenue the budgeting exercise can take on a rather stressful state if this is not done in a factual and clear manner. Having a clear picture, statistically, of the revenue expected and the revenue streams where the identification of the ways the business entity if going to make money will contribute to the actual business engine’s financial status. This form of budgeting is important in ensuring the business entity does not project unrealistic revenue earnings that will eventually fall short of the expectations.

The Basics

The expenses which usually fall into three separate categories such as the semi-variables, fixed costs and the variables are also usually considered in the budgeting exercise. All these calculations are done on the monthly ratio which the business progress dictates.

This is the most detailed section of the business engine and usually also required the most attention when it comes to managing the costing elements.

The profits meant to be derived are usually the reasons why the business endeavour is being taken on in the first place, thus the basic profits calculated are also part of the budgeting process.

Successful business entities calculate the monthly budgets and make the necessary adjustments accordingly to ensure optimum profit making probabilities. Calculations for budgeting purposes can also be done on a daily, weekly or monthly basis depending on the individual business requirements and style.