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Budgeting is very important for the following reasons:-
* To analyse the total money you have in hand at present and divide it for various matters of the business such as entertainment, utilities, salaries, etc.....
* To forecast the expense for the coming period and make sufficient margin for profit.
* To know the limit you can spend for a particular period. For eg: quarterly, half-yearly or yearly.
* To know if you are within a particular limit of spending money on various expenses for a particular period, in order to ensure that you don't cross the spending limit unnecessarily.
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