Budgeting for a Better Bottom Line
IN THIS CHAPTER
Getting up to speed on budgeting fundamentals
Gathering accurate information and projections
Drawing up a budget — the essential budget documents
You need accurate information to make smart decisions about your business. A well-planned budget may be the most important piece of information you use. Budgeting is a proactive process. It’s the thinking person’s accounting. You anticipate future outcomes and can maximize them. You anticipate problems and may be able to minimize or eliminate them. That’s a lot better than operating in ignorance and reacting to events as they arise. In this chapter, you look at budgets, consider how to anticipate costs, and work through some essential budget documents.
Brushing Up on Budgeting Basics
A budget is a financial plan that includes both financial and non-financial information. Its most obvious features are revenue and expense projections — how much you anticipate earning and spending. The budget can also contain non-financial information, such as how many employees you think you need.
A budget is a forecasting document, but businesses also use it as a financial control tool to monitor ...