Question

What are some of the benefits of budgeting?
- Why is the sales forecast the starting point for a budget?

Answer 1

Answer :

1. Some of the major benefits of Budgeting are as follows :

• It helps to focus on improving financial goals.
• It provides plan for future.
• It gives control over money.
• Helps in improve savings.
• It helps to identify what and when to borrow.
• It helps in identifying leaks and reducing waste of money.
• It helps to prepare for emergencies.

2. Sales forecast is the starting point for all activities. It gives direction. Sales forecasting helps in planning strategies and making decision for future.

It helps organizations to decide what to produce or not. It helps organizations in estimating their exact position in market and utilize resources in optimum manner.

Sales forecast is starting point because sales impact every aspect, activities & cost of any product. Sales help in determining revenue and direct cost and without forecasting sales we can't predict that.

Sales forecasting is also very useful for marketing strategies. It not only provides sales prediction in terms of numbers but also provides details regarding customer needs and preferences.

We can also say that product, price , promotion and distribution, they all revolves around sales forecasting.