A budget is very helpful for an individual, an organization or a company to manage in allocating money. There are some kinds of budget. Financial budget is one of them. Financial budget predicts the income & expenses of a business. To discuss it further, let’s see the sample financial budget.
How to Write a Sample Financial Budget
To have a good financial condition, you need this sample budget. However, creating a financial budget requires you to follow some rules and provide some sections. At the beginning, you should start it with a title. You can simply write Financial Budget, followed by the name of your company.
After that, you can enter the main point. Here, there are 3 sections you need to provide. All of them cannot be missed. They are cash budget, budgeted balance sheet and capital expenditure sheet. You have to provide the information related to them all clearly and completely. Let’s discuss each section.
You should provide cash budget first. It contains information related to the inflows & outflows from your business. As we know, cash flow of a business always changes so that the cash budget will also change. So, creating a cash budget is really a dynamic process. It is not static.
Because of that, there must be a direct or immediate reflection of changes in the cash budget’s cash flow of a business. There is no limitation about the cash budget. It depends on your own business. The bigger the business, the more cash budget will be.
In making a budget template sample printable, you cannot forget providing budgeted balance sheet. It is the second section of the financial budget. For your information, it comprises some other budgets. In fact, the cash budgets between inflows and outflows are usually not balanced.
There are many components related to the budgeted balance sheet. The major components of budgeted balance sheet usually include the budget for production. Besides that, its associated budgets also belong to this kind of budget.
The last section is capital expenditure budget. As its name, capital expenditure budget is related to some expenses used for plant & machinery. Besides, capital expenditure budget may also relate to any capital asset of a business.
Capital expenditure budget determines expenses that will be incurred when an existing plant is replaced. It may also happen if new machinery is bought. There are many possible factors such as machinery life, cost of plant, depreciation, etc.
Tips to Make a Financial Budget
There are some steps and tips in creating a financial budget. First, you need to calculate the expected both inflow and outflow. Besides that, it is also very important for you to set a target. The target depends on your company.
Then, to make it easier and clearer to understand, you need to divide expenses into some categories. You should also keep track of the components in the budget. Last, you have to set up the ledge. Now, it is your turn to practice creating a sample financial budget like this.
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