In the budgeting process, What is the first budget to be prepared? and Why?

1.  The first Budget to be prepared is the Sales bedget    
2. because the production budget and all the other budgets for the company are derived from the sales budget. If sales are expected to be low, the company does not need as much inventory or as many sales people, and so on. On the other hand, if sales are expected to be high, more of each of these resources will be required.

I agree with Mohamed. Sales budget is the most important. If you know the sales volume you can create the production budget and then direct and indirect costs budgets.

I agree with Mr. Mohamed Ghazi.

sales budget needs to be prepared first as the rest of the budget depends n the sales volumeand mix forecaset.

I agree with Mr. Mohamed Ghazi if his question relates to some types of entities, and not agree with him if his question is a general question, because some entities need not to start with the sales budgets (e.g: governmental & Not for profit entities ). In general, you can process all departments' budgets at the same time.

A 'Smart' Question indeed!

I fully endorse your Wonderful/Constructive submission Mr. Mohamed Ghazi. Thank you so much.

sales budgetis the first budget prepared because sales volume affects production and purchacing levels,operating expenses and cash flows. once a firm can estimate sales, the next step is to decide how much to produce or purchase.