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Hello Muhammad,
I am sorry that I couldn't get to you earlier with this one, but since Youssri has detailed a very beautiful explanation, I'd like to go with him.
Thank you!
NC.
it is an estimate of Income and Expense for a perticular period or perticular activity
Budget
"It's like a roadmap for your company"
Drafting a budget is a key way to help you turn your dreams for business success into reality.
Starting point to initiate the budget
A budget should include your revenues, your costs, and -- most importantly – your profits or cash flows
So, obviouslly the revenue needed (interms of total units and unit prices) for the future requirement is the starting point of the budget
As previously mentioned, it is the financial expectation of a certain period for the organization.
The major part is estimating the income statement, therefore the starting point is usualy the expected revenue. Fianancials and budget experts can have their budget estimation, and challenge any planned estimation, however, I personally always stress that the revenue expectation should be decided between sales/marketing team and the top managment. After estimating the revenue you can start estimating the cost, I also prefer to built it on fixed / variable cost principle.
Some companies end the budget by the income statement, but you can also add expectations to balance sheet, and cash flow.
Best of luck.
I agree with all the answers
Budget is the expectation of the Management .,goal to be achieved in a particular period of time.This goal is financial, whever applicable quantitative .This is the overall direction in which Management expects the company to move to achieve the desired results.Budget comes into force after approval of the Management. Desired financial result can be the starting point for setting budgets.Then back working is required like revenue budgetted, expense budget.Then correspondingly quantities to be achieved.Then making correction for realistic values.;
