Budget

What is a Budget?

A budget is a financial plan or a formal statement that outlines an individual's, organization's, or government's estimated income and expenses over a specific period, usually one year.

It serves as a roadmap for managing and allocating financial resources effectively to achieve specific goals and objectives.

What are components in a Budget?

A typical budget includes the following components:

Income

The projected or estimated inflow of money from various sources, such as salaries, sales, investments, or grants.

Expenses

The anticipated or budgeted outflow of money for different categories like rent, utilities, payroll, supplies, marketing, and other operating costs.

Savings and Investments

Allocation of funds towards saving for future goals, retirement, or investments to generate returns.

Goals and Objectives

Specific targets and milestones that the budget aims to achieve, both in terms of financial performance and strategic objectives.

Variance Analysis

Comparison of actual financial results against the budgeted amounts to assess performance and identify areas for improvement.