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A budget is a plan for the future, which is set out in numbers. It sets out figures that you hope to achieve in the future. |
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For example, you may create budgets for: |
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Budgeted sales |
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Budgeted expenses |
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Budgeted Profit and Loss etc. |
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For example Budget report
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below is a budget report for a service company in the six months to April: |
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Nov |
Dec |
Jan |
Feb |
March |
April |
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Budgeted Sales (£) |
10,000 |
12,000 |
8,000 |
9,000 |
18,000 |
25,000 |
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Budgeted Costs (£) |
5,000 |
6,000 |
4,000 |
4,500 |
9,000 |
12,500 |
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Budgeted Profit (£) |
5,000 |
6,000 |
4,000 |
4,500 |
9,000 |
12,500 |
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Comparison budgets vs actual results
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April Budget |
Actual figures for april |
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Sales (£) |
25,000 |
20,000 |
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Costs (£) |
12,500 |
12,500 |
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Profit (£) |
12,500 |
7,500 |
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The actual figures achieved by your company may be different from the budgeted ones. |
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For example April actual sales figures may be £20,000 because demand is less than expected. However, actual costs may be similar to your budgeted costs due to your ability to monitor and control your costs. If this is the case, it implies your actual profit would only be £7,500 and not £12,500 which means you are short of your budgeted figures by £5,000. This is likely to have an impact on your profits and bank balance. |
How we can help?
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At Accountancy Champs with our experience and knowledge, we can assist you with putting together a plan to achieve your desired targets. Get in touch by either calling us or using the get a quote form. |
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We offer service packages such as secure business finance or monitoring business performance service package (which covers budgeting) to meet your budget or individual needs. |
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