budgets

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  • Created by: anna28
  • Created on: 22-04-15 16:26

Key words

Budget - A financial plan for the future, concerning the revenues and costs of a business

Adverse variance - when costs are higher than expected or revenue is lower than expecteed

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Income budgets

A target set for the amount of revnue to be achieved over a period of time

can be split by product/service/departments

Can be individual sles targets for staff

informed by market research and sales forecast

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Expenditure budgets

can be split by department/function/product

responsibility can be passed on to individual managers

Informs cash outflows in cash flow forecast

allows monitoring on expenditure

A limit placed on the amount to be spent in a given period of time

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profit

A target set for surplus between income and expenditure in a given period of time,

may be set for  a business as a whole or individual departments

Business plan will be used to hghlight potential and feesability of the business

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