Smart Budgeting
By Ilona Albert on Sep 17, 2008 in Financial Independence
Once a budget is approved, you should make sure that it is immediately put to use. In particular, you can use it to evaluate your financials. This is the evaluation of a particular business function by comparing its budgeted and concrete results. For example, assume that your budgeted salary costs for the previous year totaled $200,000.00 but your actual spending reached $300,000.00. You can then look for the reason for the variance of $100,000.00; you might find out that it was due to overtime costs that were not fully anticipated. In any case, the outcome of this process can provide you with valuable information for planning the next budget cycle and for keeping your business on track.
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