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Budgets for businesses

Taking time to plan your business' future actitivities can help lead to its success.  The budget you prepare is the translation of these activities into financial terms. 

Finance for nonfinancial managers
H. George Shoffner, Susan Shelly, Robert A. Cooke.
New York : McGraw-Hill, c2011.
This fully revised and updated Third Edition helps managers understand what the numbers really mean--even if they have no experience in finance. "The McGraw-Hill 36-Hour Course: Finance for Nonfinancial Managers" walks readers through the essential concepts of finance, provides vital statements and reports, covers pro forma financial statements, and explains the auditing process.
     
Not-for-profit budgeting for nonprofit organizations
Edward J. McMillan.
Hoboken, N.J. : Wiley, c2010.
Take control of your organization's short- and long-term financial planNow fully revised, Not-for-Profit Budgeting and Financial Management, Second Edition, offers a financial planning system that is not only easy to use and monitor, but also ensures true fiscal accountability in the complex not-for-profit arena. Adds three entirely new chapters on Footnoting the Statement of Activity, Presenting Cash Prepared and Accrual Statements on the same page, and The Importance of the Executive Summary Fully updated with the latest financial advice to benefit your nonprofit Explains how to separate controllable, semi-controllable, and fixed expenses Reveals how you can prepare and present such top-notch budget documents that budgets will be approved the first timeWritten in a nontechnical, understandable format, incorporating dozens of relevant forms and documents, this completely revised and expanded edition will enable your nonprofit organization to create and manage reasonable financial plans that fit their organization's needs.
     
Budgeting basics and beyond
Jae K. Shim, Joel G. Siegel.
Hoboken, N.J. : J. Wiley & Sons, c2005.
Budgets-they can make or break an organization. They can also make or break the manager responsible for devising and monitoring the budget. Budgeting Basics and Beyond, Second Edition provides managers with a hassle-free resource that's guaranteed to make the budgeting process easier, less stressful, and more effective. This updated edition features new information on: service and nonprofit applications; types of financial models; Web-based budgeting and planning solutions; budgeting for service organizations; using budgeting to reduce departmental expenses; and much more!
     

A budget is "the primary tool which management uses to monitor the progress of the business during the year.  It sets out in financial terms management's vision of how the company should develop..."

(more from Management Today)

A budget should:

  • Explain what your organization can or can not do;
  • Explain the support you need to meet your commitments;
  • Help set realistic goals;
  • Provide communication with bosses, subordinates, peers, and other organizations; and
  • Show your understanding of the company's financial matters.

There are three types of information presented in a company budget:  (1) Costs, (2) Outputs, and (3) Supplemental. 

Finance without fear : a guide to creating and managing a profitable business
William S. Hettinger ; John Dolan-Heitlinger.
Windham Center, Conn. : The Institute of Finance and Entrpreneurship, c2011.
Finance Without Fear should be read by anyone starting or managing a business. The easy-to-read style helps remove the fear of finance for the entrepreneur, the small business owner, and the manager. Finance does not need to be mysterious and intimidating. Basic business finance is not hard to understand, and the business owner or manager who understands finance has a leg up on the competition. Finance Without Fear explains the key financial statements the cash flow statement, profit and loss statement, and balance sheet and provides the tools to analyze these financial statements. Genuine case studies of small businesses a retail shop, small manufacturing business, and medical office - are used throughout, so you can compare the way your business works to the case studies, and to industry norms. In the short amount of time it will take to read Finance Without Fear, you will learn the basics of finance, and the keys to creating and managing a profitable business.
     
Finance for nonfinancial managers
H. George Shoffner, Susan Shelly, Robert A. Cooke.
New York : McGraw-Hill, c2011.
This fully revised and updated Third Edition helps managers understand what the numbers really mean--even if they have no experience in finance. "The McGraw-Hill 36-Hour Course: Finance for Nonfinancial Managers" walks readers through the essential concepts of finance, provides vital statements and reports, covers pro forma financial statements, and explains the auditing process.
     
Corporate finance demystified
by Troy Adair.
New York : McGraw-Hill, c2011.
The simple way to master corporate financeThe math, the formulas, the problem solving . . . does corporate finance make your head spin? You're not alone. It's one of the toughest subjects for business students--which is whyCorporate Finance DeMYSTiFieDis written in a way that makes learning it easier than ever.This self-teaching guide first explains the basicprinciples of corporate finance, including accountingstatements, cash flows, and ratio analysis. Then, you'll learn all the specifics of more advanced practices like estimating future cash flows, scenario analysis, and option valuation. Filled with end-of-chapter quizzes and a final exam,Corporate Finance DeMYSTiFieDteaches you the ins-and-outs of this otherwise confounding subject in no time at all.This fast and easy guide features: An overview of important concepts, such as time value of money, interest rate conversion, payment composition,and amortization schedules Easy-to-understand descriptions of corporate finance principles and strategies Chapter-ending quizzes and a comprehensive final exam to reinforce what you've learned and pinpoint problem areas Hundreds of updated examples with practical solutionsSimple enough for a beginner, but challenging enough for an advanced student,Corporate Finance DeMYSTiFieDis your shortcut to a working knowledge of this important business topic.
     

The most important required information is predicted costs. Often this type of information is required in considerable detail. Management usually wants to track costs and profitability.

Outputs are ultimately related directly to revenue.

Supplemental information may include assumptions used when creating the budget.

Budgets are used by management in the following six ways:

  1. To implement strategy:   The main purpose of a budget is to ensure that proper priorities are being given to items that management wants to emphasize.
  2. To co-ordinate all company work:   Higher management uses a budget to see that the whole company is going in the same direction.
  3. To predict results and needs:   A budget is a useful tool used to learn what resources are required to produce expected results.
  4. To keep score:   Comparisons of actual results to the approved budget help show year-to-date changes to company, department, or  unit budgets.
  5. For control:  Upper management uses a budget to control costs and activities.
  6. For measurement:  Budgets are used to measure how managers and their staff meet their targets.

Budgeting is a powerful management tool that assists managers to attain their goals. Learning how to build in performance improvement, plus gaining the respect of upper management are positive results of creating budgets.  Seeing your business succeed, though, is probably the best result.

Article by: St. Louis Public Library staff