Question

Budgets are absolutely essential for all businesses because they give financial life to the plan of what we want to accomplish for the business, for this coming year say, and what metrics do we need to hit to consider ourselves having achieved our goals.

Point out say 3 key points as far as Budgets are concern and why do those 3 stands out to YOU?

Next what's Wrong/Right about your 3 observations in what they are doing?

Lastly your view, if wrong how do we fix it, if right can we still make that aspect even better?

Answer 1

1. The budget should be prepared based on the estimates of Income generated to the firm

2. Analyse the expenses to incurr in the period of budget

3. The incomes should be more than the expenses in budget.

These stands points are the very basic in preparing any budget and based on these only anyone can prepare a budget so, I considering these three points are very important in preparing our budget.

Some times the estimated figures may vary, like income may increase or decrease or expenses also may increase or decrease. There are two conditions that may come one is favourable and other is unfavourable condition. So you should estimate better to skip those conditions or to reduce deviations to low such a way it will not effect

So, to avoid wrongs study carefully the conditions of business and consider all factors in devopling a budget. So that it increases the effectiveness of budget.

And finally by understanding facts, conditions existed and preparing budget makes your budget more perfect.