Overview

Everyone at some point in their life has made a budget. Did you ever want something that you had to save for - such as a new bike, a new pair of shoes, the latest computer game, or later in life, maybe a car or house? If so, then you probably set yourself a goal, calculated what you needed to save each week and worked towards achieving your goal. In other words, you prepared a budget and managed your finances to achieve the desired results.

Budgeting in business is essentially the same. It is about estimating and planning for something that you want to achieve (a profit!), working towards your goals, and then reviewing your budget at a later date to see if you achieved it.

Personal budgets can be changed or altered and may not be strictly adhered to. However in business, budgeting requires careful planning and is crucial in the day-to-day operation, profitability and growth of your business.

A budget is only as reliable as the information it is based on. Accurate information on your business’s operation, analysis of previous budgets and an understanding of your industry will help you manage your current budgets.

So let’s look at how you can successfully interpret your budgets and manage your finances.

In this unit you will learn how to:

• Allocate budget resources
• Monitor financial activities against budget
• Identify and evaluate options for improved budget performance
• Complete financial and statistical reports.