Budgets

Budgets

1. Purpose

   • To control resources
   • To communicate plans to various responsibility center managers
   • To motivate managers to strive to achieve budget goals
   • To evaluate the performance of managers
   • To provide visibility into the company's performance
   • For accountability

2. Different Types of Budgets

   • Business start-up budget
     • The process of calculating the costs of starting a small business begins with a list of all necessary purchases including tangible assets (for example, equipment, inventory) and services (for example, remodeling, insurance), working capital, sources and collateral.
   • Corporate budget
     • The budget of a company is often compiled annually, but may not be a finished budget, usually requiring considerable effort, is a plan for the short-term future, typically allows hundreds or even thousands of people in various departments (operations, human resources, IT, etc.) to list their expected revenues and expenses in the final budge.
   • Event management budget
     • A budget is a fundamental tool for an event director to predict with a reasonable accuracy whether the event will result in a profit, a loss or will break-even. A budget can also be used as a pricing tool.
   • Government budget
     • The budget of a government is a summary or plan of the intended revenues and expenditures of that government. There are three types of government budget : the operating or current budget, the capital or investment budget, and the cash or cash flow budget