Budgeting is a financial plan prepared annually and identifies desired objectives and goals for individuals and is an essential component of financial success for any business.
A budget is a business’s financial plan to manage better monthly, quarterly, and annual cash inflows and outflows. The purpose of budgeting is to have a point of reference for evaluating performance against financial goals and objectives.
It helps an organization authorize and allocate financial resources and is an effective communication tool to express the financial goals and objectives of the organization.
A.M.I. CPA Professional Corporation will work with your finance and accounting department to look at major differences between actual versus forecasted and provide feedback and/or comments on areas of improvement.
Although the concept behind cash flow is simple, there are a number of steps you need to take to budget for and control cash flow to ensure that your business always has the required operating funds.
Although an accountant can provide the necessary assistance, it’s important that you are familiar with the process. The preparation of a cash flow budget requires that you consider cash in (receipts) and cash out (outflows)
To know these figures, you will have to make a series of assumptions about how your business will be operating. If your cash outflows are greater than your receipts, then you have an early warning that you should take action and get the advice of a professional.