Why bother to budget
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Budgeting is important for controlling expenses, prioritizing financial goals, and adapting to changes. A budget outlines projected income and expenses over a set period of time to help manage a business's finances. Specifically, a sales budget tracks prospects, leads, opportunities, work in progress, order books, and sales targets. It is broken down further to account for costs of sales like wages, materials, and overheads. A full budget also includes fixed overhead costs, capital expenditures, and monitors the cash cycle through metrics like debtor days, stock days, and creditor days.
Why bother to budget
- 1. Why bother to budget?
- 2. Simply put, a budget is a summary of likely income and expenses for a given period. It is an invaluable tool to help you control, prioritise and manage your business. Planning and monitoring your budget will help you reduce waste, adapt to change and achieve your financial goals.
- 3. Sales Budget Prospects Leads Opportunities Work in Progress Order Book Orders Target Estimates Targets
- 4. Cost of Sales Wages Materials Direct Overheads
- 5. Overheads Fixed Costs Salaries Premises Other
- 7. Cash Cycle Debtor Days Stock Days Creditor Days