What is Budget ? Types of Budget

what is budget

Do you have any idea about a budget in your mind? Do you know why it is used? Are you familiar with its different categories? These all questions are very important to be answered. By reading this article, you can get answers to above questions in a concise way.

Budget is a list of all intended costs and incomes to estimate savings and spending. Budget endows with an estimate of revenues and expenditures by constructing a model of how a business might perform financially. The budget also enables actual financial operations of the business to be measured against forecast.e831b30b2ff3073ecd0b470de7444e90fe76e6dd19b5104695f6c1_640_budget

Budget plays very important role in all fields of our lives. All our expenditures highly depend upon budget. Every matter of our lives can go smoothly only if plan your budget well and maintain it. Budget is not only important for businesses but it plays the same role for personnel so its planning is crucial at all levels. Budget planning is essential as we are required to maintain our budget while arranging different parties as well as different events. The format of planning for your budget at business level can be followed by Budget Planning Template. This will be very beneficial for you to provide you a proper guideline about the planning of a successful budget.

Aside from budget planning, there are different categories of a budget. These are:

  • Sales / Revenue Budget
  • Profit Budget
  • Cash Flow Budget
  • Financial Position Budget
  • Production Budget
  • Purchase Budget
  • Expenditure Budgets
  • Cash Budget
  • Master Budget
  • Zero Base Budgets
  • Flexible Budget
  • National Budget
  • Company Budget
  • Personal Budget
  • Corporate Budget
  • Government Budget
  • Business Set Up Budget
  • Partial Budgeting
  • Capital Budgeting
  • Performance Based Budgeting
  • Incremental Budgeting 
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All above-described budgets play very important role in their relevant fields and purposes. To prepare well-planned budgets, you should follow a budgeting process. This process involves some basic steps: 

  • Classifying expenditures
  • Determining different resources of income
  • Preparing budget
  • Laying down budget procedure
  • Allocation of income for expenditures
  • Observing effectiveness of budget 

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