Budgets expresses the expected expenditure for a particular activity over a given period of time. It also involves itself in the process of approximating costs and project expenditure for a given period of time. Governments are required to have a budget which is examined and allowed by different stakeholders of the governments and followed to the letter. When budgeting, time aspects are very important so as to work with deadlines of different activities as planned, time is money in business budgeting. Reduced expenditure in turn raises efficiency of the business significantly thus the cost of production of a unit product is lowered to the most optimum level. Cost accountants too can be used to provide professional advice to the businesses which are budget operational and oriented.
A project authorised and allocated to funds, should be authorised and supervised by a qualified, certified and well experienced project manager or project management team depending on the size and volume of work. It involves estimation, scheduling, accounting and design. Project management systems are cheap as compared to employing project management personel in the business who will require salaries and remuneration at the end of each month or contractual period.
Expenses such as payment of salaries, insurance bills, electricity and water bills, bad debts, procurement of stock material are done in the project cost eatimation. As time changes, prices changes in accordance to the state of the economy, predetermined and already set costs may be lower or at times higher if the prices of the required products and resources gets higher or lower respectively. Some reserve money should be put aside so as to cater for instances of emergencies and to ensure the project runs smoothly without hitches thereof.
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The set objectives should be practicable and should make sense to any reasonable man.
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Government regulations and restrictive orders and tax policies should be a matter of much importance when or before drafting a business budget. Ancilliary resources such as raw materials and operational tools should also be valued and bought at economically fair prices but if they are too expensive, then hiring them is also another option that exists.
Some budgets require to be made with time deadlines or for others, not within a lesser timeframe than that which is stipulated as the legal one.Business prefer having cash so as to replace it to different expenditures and investments so having the invested funds back at a small period of time is desirable. Budgeting could improve productivity as cost is kept at the economically sensible levels thus meeting the set objectives at a smaller period of time. An objective business has higher chances of success thus, budgeting is a positive measure that all businesses should enforce.