A few weeks ago, while I was out on my morning walk, I met a very close friend of mine after a very long time. During our conversation, he told me how he was planning to buy his dream house!
I got so excited! Isn’t that amazing?
But he wasn’t much excitement. In fact, he looked worried!
“What’s wrong?” I asked. To which he expressed that his startup wasn’t growing and how there were a lot of unexpected liabilities which lead to a financial crunch delaying his plans of buying his dream house!
What happened next was a 20-minute conversation about how corporate budgeting is necessary for startups!
And today I’m going to pass on the learnings to you, but first….
What is Corporate Budgeting?
Corporate Budgeting is a process by which businesses estimate their finances for a future period and plans their operations accordingly. It’s a financial plan for a definite period. It is an estimation of revenue & expenses over a specified period.
It’s simply balancing your expenses with your income.
While developing a corporate budget, a business usually starts with a project plan, then determines the amount of time, goals, and costs of the project.
Well now that you what corporate budgeting is,
Let’s look at how it’s going to benefit your company and save you from the financial crunch
- Corporate Budgeting helps manage your money effectively which reduces unnecessary expenditures in your organization.
- It helps in the allocation of appropriate resources to projects
- It helps in timely monitoring organizational performance with the help of MIS
- It helps in achieving the short-term goals & objectives of an organization
- It helps to identify problems before they occur – such as raising finance or managing cash flow difficulties.
But the best part is it helps to plan for the future.
Still with me?
Now that you also know the benefits of having a budget in your organization
It’s time to learn how to create a budget and what the key points are that must be kept in mind while making the budget for your startup/business
Well, Hold-on!
That’s a topic for another week, See you soon!
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