Budgeting
- Created by: Benjhigg
- Created on: 07-04-15 14:41
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- Budgeting
- Budgeting process
- 1. Setting an accurate and reliable budget is key to success for a business
- 2. All budgets should be related to the organisation's objectives
- 3. Market research should be carried out to assess demand and cost
- 2. All budgets should be related to the organisation's objectives
- 1. Setting an accurate and reliable budget is key to success for a business
- Budget methods
- Sales revenue based budgeting
- Competitor based budgeting
- Zero budgeting
- Trying to get to the figure zero
- Objective based budgeting
- Previous year budgeting
- Does not include inflation or change to business
- Why budget?
- Provides focus and direction
- Em-powerment and increased motivation
- Enables financial support planning
- improves efficiency
- Enables managed and controlled spending
- Potential issues
- Unforeseen changes
- Managers lack knowledge to make decisions
- Inflation increases costs
- Making budgets is time consuming
- Income budget
- Planned inflow, for an organisation, over a set period of time
- Expenditure budget
- Planned outflow, for the organisation, over a set period of time
- Profit budget
- Planned profit over a set period of time, for the organisation.
- Budgeting process
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