A true budget hence portrays the business’ s true worth and potential. Each budget committee member also makes sure that the budget is appraised and reviewed regularly, for instance, every month. This calls for even more timely collection of data and keeps the committee on track with the latest trends in financial costs inclinations. The budget committee hence helps in saving a lot of time and money and keeps the entire business organized. (Brian Tracy, 2004). By, the flow of a budget, it is meant how basically a budget is prepared.
calls for an outlining of things that come first or are considered first when making a budget, second, third and so on. A budget as mentioned above undertakes many important goals and deals with different types of financial trends, costs, analysis and decision making etc. The stages involved in the flow of a budget are as follows: Sales value (estimated): The first thing that a budget undertakes or includes in itself, is the probable amount of sales in value for the month the budget is being made for. This based on a complete analysis of the marketing and sales function of the business.
Hence, the data involved here is that of a number of goods sold, amount spent on advertising and marketing etc. There are usually written or recorded by a high, medium and low sales tag (estimated sales that are. Operating Costs: this is the second part of the budget. This illustrates what the business has spent on regular everyday expenses and how much. These costs can be related to the human resource department or even the or dispatch/delivery department etc.
from heating and lighting, to cost of fuel to salaries of employees, all come under the tag “ operating costs” . A budget hence deals with these different costs listed clearly as follows: Profit or Loss (monthly): this part of the budget includes the cumulative profit or loss from operations of that month only. This step is useful for the budget committee for analysis purposes that it does later at the end of the year usually to find out the broad trends and inclinations in sales, profit, and losses.
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