At Senstone, we will help you prepare your budget based on the needs of your business and your future plans and projections.
Understanding the budget
A budget is a financial plan for future activities. A budget forecasts the financial results and financial position of a company for one or more future periods. A budget is used for planning and performance measurement purposes, which can involve spending for fixed assets, rolling out new products, training employees, setting up bonus plans, controlling operations, and so forth.
The budgets used in business often include a sales or revenues budget detailed by products or services, production budgets, budgets for each department in the company, cash budget, capital expenditures budget, and others. The combination of all the budgets is referred to as the company's master budget.
Budgets help management decide which activities it will undertake and how the company's resources will be used. Budgets can also assist in controlling the actual costs, because managers realise that the costs of their activities will be compared to the budget.
The differences between the actual amounts occurring and the budgeted amounts are known as variances.
Using the budget
By establishing your performance goals and putting them into a plan, it allows us to monitor the business on an ongoing basis. We can compare the performance of the company to the budget on regular intervals, whether its monthly, quarterly or yearly. We can analyse any variances and update the budget where necessary.