Using Budgets.

MONITORING BUDGETS. Once a business has planned its sales revenue and expenditure, it is essential to monitor the accuracy of these financial plans by comparing the budget and the actual figures.

Budgets allow managers to make decisions on how to improve the performance of a business:

• Analysing budgeted and actual expenditure
• Analysing sales revenue
• Analysing profits budgets

Variance Analysis-is the process of investigating any differences between forecast data and actual figures. This can result in either favourable or adverse variances.

Favourable…