Budgets

Budgets

1. Advantages

   • It will set a limit on spending which must be adhered to
   • It will help the owner(s) prioritise spending/sales targets
   • It will help to plan ahead and make sound business decisions
   • At the end of the year the owner(s) can compare the actual spend/sales against the planned budget and identify areas that might need looking into

2. Disadvantages

   • The numbers in the budget need to change as circumstances change
   • If the numbers in the budget are inaccurate then monitoring expenditure/revenue against will be useless