A budget is a financial plan that outlines estimated revenues and expenditures. It provides a logical and realistic plan to identify and allocate limited resources. It is important to prevent overspending and monitor spending and revenue. To create a budget, one should consider goals, historical trends, current clients, new opportunities, and future market conditions. The budget should be discussed, modified if needed, and formally approved before the new year starts. Comparing actual results to the original budget allows an organization to see what it did compared to what it planned to do.

1. Budget Guidelines
(Let us predict the future)

2. What is a budget?
Financial and/or quantitative statement
Management's plan or blueprint, in structured form
Projects or anticipates the desired outcome
Contains policy to be pursued to attain given
objective

3. Components of budget
Estimated Revenues - What are the anticipated
sources of revenue and how much can management
realistically expect to receive?
Estimated Expenditures - How much does
management expect to spend, and for what purposes
are resources to be spent?

4. Importance
How funds are to be collected and spent
Provide a logical, detailed and realistic spending plan
A mean to identify and allocate limited resources

5. Importance (cont..)
Prevents from overspending
Provides information on operations
Monitors and controls spending and revenue
collection

6. How to begin?
Goals and objectives for the coming year
What are current clients/vendors?
Historical information/trends
What is working well and what needs to be changed?
New clients/vendors
What destinations does the organization wish to
support?
Future Prospects/Market Condition

7. What should I do?
opportunity
opportunity weakness threat
weakness
strength opportunity
threat threat
opportunity threat weakness
strength strength
threat threat
weakness strength
opportunity
opportunity weakness
weakness

8. Identify your resources

9. Identify your resources (cont..)
or

10. Example
Customers Budgeted Business = 328,000
Share (amount) 1,000 65,000 4,500 112,500 72,000 60,000 13,000
Share (%) 5% 65% 15% 25% 60% 50% 65%
Capacity 20,000 100,000 30,000 450,000 120,000 120,000 20,000
Customer A B C D E F G

11. Do the best
Department heads gather data/information by
coordinating with whoever is dealing with relevant
areas.
Data is reviewed and modified before being
incorporated into the ‘proposed budget’.

12. Make it better
Budget should be discussed, modified, or
challenged before being formally adopted.

13. Get it approved
Proposed budget should be formally approved or
adopted before start of next year.

14. Happy New Year
Get ready for the action

15. Locate the Best
A comparison of actual operating results with the
original budget would show the management
comparison of:
What the organization did
What it initially planned to do

16. Locate the Best (cont...)
Review Meetings:
Weekly
Monthly
Quarterly
Annual

17. Beat the winner

18. Lets change
There may be situations where adjustments may
be necessary in working methodology and/or in
budget.
Budget Adjustments (having proper justification)
should be discussed and get it approved by the
management.

19. Success path

20. Lets share

21. Conclusion
A budget that is carefully prepared, closely monitored and
accurately interpreted can mean the difference between
success and failure.
Budgets will only be reliable if management routinely holds
accountable its departments for strictly adhering to
budgetary procedures.
Budgetary goals and objectives should be clearly
communicated to all responsible individuals, with the
expectation that procedures be followed so as not to
compromise or jeopardize.

22. Thank You