Compare the stages of a typical budgetary process
Compare the stages of a typical budgetary process? Understand, analyze and interpret budget variance report and identify strategies relevant to cost control
Compare the stages of a typical budgetary process
Compare the stages of a typical budgetary process. Understand, analyze and interpret budget variance report and identify strategies relevant to cost control
More details;
Typically used to describe government budgeting, the four-phase budget cycle also applies to small businesses that operate based on a budget. Each step or phase of the process is, in and of itself, valuable to your business. Additionally, each requires consideration of your business’ expenses and how they will affect your company’s profitability.
Tip
The four phases of a budget cycle for small businesses are preparation, approval, execution and evaluation.
A budget cycle is the life of a budget from creation or preparation, to evaluation. Most small businesses don’t use the term “budget cycle” but they use the process and go through each of its four phases — preparation, approval, execution and evaluation.
Prepare Your Budget
The first step of the budget process is to create it. Done right, this process starts with careful thought at the ground level. How much income is need ed? What new initiatives can be start ed should be consider ed.
As the small-business owner, your leadership and vision will guide what’s included and what’s excluded from the budget. You’ll also consider anticipated revenues; expenses for employee wages, operations and also materials; and costs for any improvements you plan to make to your company.
Get Your Budget Approved
While the political budgeting process is a bit messy, one of its underlying principles is very meaningful for your business. Budgets aren’t approved on a yes or no basis. Instead, they’re the subject of debate.
While, at times, the political process can distort budgetary priorities, businesses don’t have to fall prey to that problem. Instead, the approval process can be an opportunity for you to step back and take another view of how your company is spending its funds.
