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Creating, monitoring and managing a budget is key to business success. It should help you allocate resources where they are needed. You simply need to work out what you are likely to earn and spend in the budget period.
Begin by asking these questions:
What are the projected sales for the budget period? Be realistic - if you overestimate, it will cause you problems in the future.
What are the direct costs of sales – i.e. costs of materials, components or subcontractors to make the product or supply the service?
What are the fixed costs or overheads?
You should break down the fixed costs and overheads by type, e.g.:
Your business may have different types of expenses, and you may need to divide up the budget by department. Don't forget to add in how much you need to pay yourself, and include an allowance for tax.
1- Sales plan.(quantities and prices) and the expected transporation and export expenses and commistion commissions.
2- Manufacturing budget it will include
the required material
the required manpower,
and the uitilities to execute the plan.
3- Salaries and Wages budget.
4- Indirect expenses budget.
5- Depreciation schedule from your assets file.
6- Capital budget.
After collecting all these data you will be able to prepare your master budget.
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