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Budgeting & 

Budgetary Controls

Background

Budgeting is the process of calculating how much money you will earn during a particular period of time, and planning how much you will spend, save, and borrow. A budget helps the organization to allocate the resources of the company to different departments and activities to manage the cash flows of the business in an effective way. There are many types of budget such as cash budget, capital expenditure budget, revenue and expenses budget, financial budget etc.

 

A financial budget in budgeting is predicting the incomes and expenses of the business on long-term and short-term basis. Right projections of the cash flow help the business to achieve its targets in the right way.

 

Financial budget preparation includes a detailed budget balance sheet, cash flow budget, the sources of incomes and expenses of the business, etc. The evaluation of incomes and expenses is done on a monthly, quarterly, half-yearly or annual basis, depending upon the suitability and needs of the organization. A financial budget is a very powerful tool to achieve the long-term goals of the business. It keeps the shareholders and other members of the organization updated about the functioning of the business.

The Challenge

Companies fail to prepare or implement such a powerful and important business tool of budgets due to the following challenges faced by them;

 

  1. Non availability of internal resources to study cost structure and patterns

  2. Time consuming and expensive to hire able resources

  3. Variable expenses and lack of relationships

  4. Tracking and understanding of expense natures

  5. Lack of historical and forward data

  6. Lack of departmental coordination in budgeting process

  7. Lack of understanding the efficiency and importance of budgeting

Solution by ABL

A professional team of ABL will coordinate with all stakeholders and department heads to engage them in the budgeting process and to explain the importance about the subject. Budgets will help in setting up reasonable, attainable and measurable goals for various functions that in turn will help our clients to achieve their strategic objective. Budget tools can also be used to predict any unforeseen probable cash flow or other challenges which the company might face. ABL, subject to client agreement, will provide;

 

  • Master budget covering the whole organization

  • Revenue Budget covering

  • Sales and marketing budget

  • Expenses budget covering direct and indirect overheads

  • Payroll budget or Human Resources budgets

  • Capital expenditure budget

  • Budgeted profit and loss account

  • Budget balance sheet

  • Budget cash flow statement

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