HOW TO MANAGE YOUR FINANCES

FINANCIAL MANAGEMENT

BUDGETING

Budgeting refers to an estimate of cost, revenue and resources over a specific period, reflecting a reading of future financial conditions and goals.

A budget is a plan of action for achieving quantifiable objectives, as standard for measuring performance, and a tool for coping with foreseeable adverse situations.

TYPES OF BUDGETS

ü Operating Budget: This include Expense budget, Revenue Budget and Profit Budget.

ü Capital Budget: This is also called capital expenditure budget.

ü Financial Budget: This include Cash budget and Balance sheet budget

HOW TO PREPARE A BUDGET

Before preparing a budget, ask these questions:

1.     What is the period with which you are working

2.     What does your company want to accomplish most

3.     How will you accomplish that

4.     How much will it cost

5.     What are your funding sources

STEPS IN PREPARING A BUDGET

1.     Identifying your goals

2.     Reviewing what you have

3.     Define the costs

4.     Create your budget

Know how to budget for your business and see your business finance grow. See you next time.