Budgeting is the process of creating a plan to spend your money.
Within the budget, we can also plan ahead to see what our revenues are likely to be for the year.
Budgeting is vitally important as it will ensure that if you are managing your spend according to your budget, you should have enough money for the things that you need to purchase.
An annual Budget is set once a year and is the basis of what we think will happen. It is important to evolve the budget, and this is what is called a re-forecast. It is good practice to do a rolling 12-month forecast to see where you are in relation to your annual goals.
Re-forecasting is also very important...
This is where you can flex the budgets for new information that has come to hand. I.e. you have won a new client, or you have been able to negotiate at a cost reduction.
This is where you can put this in, to see what the impact is on the bottom line for the whole year.
A budget is basically a plan of the month/quarter/year which ensures that you are planning and always looking at the bigger picture.