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Preparing a Budget by Harvard Business School Press

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An Overview of Budgeting

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AS A MANAGER , you may be asked to prepare a budget for your department or business unit. But what is a budget, exactly? How does budgeting work, and why is preparing a well-thought-out budget important? Let’s take a closer look at these questions below.

What is a budget?

A budget is the financial blueprint or action plan for a department or organization. It translates strategic plans into measurable expenditures and anticipated returns over a certain period of time.

Budgeting activities include:

  • Forecasting future business results, such as sales volume, revenues, capital investments, and expenses
  • Reconciling those ...

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