While we were in schools and colleges, we managed our expenses and met our ends, through the allowances we got. Obviously, there were times when we wanted an increment, but you can't have your cake and eat it too. Budgeting follows the same logic, with which we manage our finances then. Honestly, it is the art of distinguishing your needs from frivolous demands. Budgeting helps you to not only reserve your resources for the rainy day, but also gives you a structured guideline for future expenses.
Sample Business Budget Plan
Particulars Actual Budget Difference
Income
Total Sales
Cash
Credit
Receipts
Bills Receivable
Interest
Wages and Bonus
Miscellaneous Income
Taxes Withheld
Investment Income
Amount Received from Debtors
Total Income(A)
Expenditure
Salaries
Rent
Postage
Advertising
Electricity
Advertising
Travel and Entertainment
Interest Paid
Taxes
Fees
Repairs and Maintenance
Insurance
Fuel
Loans and Creditors
Contingency Fund
Total Expenditure(b)
Net Income/Loss (A-B)
Features of a Budget
A budget plan is meant to give you a statement of what you have earned and what you have spent. Your money is important, and hence it must be accounted for. Many people forget to add the expenses made on stationery, transport, and postage. However, every penny spent from your kitty needs to be shown in the business budget. Getting into the habit of making your budgets will go a long way in making your business a big brand from a small outlet. It can include, interest earned and paid, cost of goods sold, taxes, rebate on bills discounted, investments made, advertising, bills payable, outstanding expenses, net profit or loss, reserves, and every possible monetary transaction.
