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Budget

A budget is a calculation plan, usually but not always financial, for a defined period, often one year or a month. A budget may include anticipated sales volumes and revenues, resource quantities including time, costs and expenses, environmental impacts such as greenhouse gas emissions, other impacts, assets, liabilities and cash flows. Companies, governments, families, and other organizations use budgets to express strategic plans of activities in measurable terms.[1]

For other uses, see Budget (disambiguation).

Preparing a budget allows companies, authorities, private entities or families to establish priorities and evaluate the achievement of their objectives. To achieve these goals it may be necessary to incur a deficit (expenses exceed income) or, on the contrary, it may be possible to save, in which case the budget will present a surplus (income exceed expenses).


In the field of commerce, a budget is also a document or report that details the cost that a service will have if performed. Whoever makes the budget must adhere to it and cannot change it if the client accepts the service.


A budget expresses intended expenditures along with proposals for how to meet them with resources. A budget may express a surplus, providing resources for use at a future time, or a deficit in which expenditures exceed income or other resources.

Sale budget – an estimate of future sales, often broken down into both units. It is used to create company and sales goals.

– an estimate of the number of units that must be manufactured to meet the sales goals. The production budget also estimates the various costs involved with manufacturing those units, including labor and material. Created by product oriented companies.

Production budget

– used to determine whether an organization's long-term investments such as new machinery, replacement machinery, new plants, new products, and research development projects are worth pursuing.

Capital budget

Cash flow/cash budget – a prediction of future cash receipts and expenditures for a particular time period. It usually covers a period in the short-term future. The cash flow budget helps the business to determine when income will be sufficient to cover expenses and when the company will need to seek outside financing.

Conditional budgeting is a budgeting approach designed for companies with fluctuating income, high , or income depending on sunk costs, as well as NPOs and NGOs.

fixed costs

Marketing budget – an estimate of the funds needed for promotion, advertising, and public relations in order to market the product or service.

Project budget – a prediction of the costs associated with a particular company project. These costs include labour, materials, and other related expenses. The project budget is often broken down into specific tasks, with task budgets assigned to each. A cost estimate is used to establish a project budget.

Revenue budget – consists of receipts of government and the expenditure met from these revenues. Revenues are made up of taxes and other duties that the government levies. Various countries and unions have created four types of tax jurisdictions: interstate, state, local and tax jurisdictions with a special status (Free-trade zones). Each of them provides a money flow to the corresponding revenue budget levels.[14]

revenue

Expenditure budget – includes spending data items.

Flexibility budget – it is established for fixed cost and variable rate is determined per activity measure for variable cost.

Appropriation budget – a maximum amount is established for certain expenditure based on management judgement.

Performance budget – it is mostly used by organization and ministries involved in the development activities. This process of budget takes into account the end results.

Zero based budget – A budget type where every item added to the budget needs approval and no items are carried forward from the prior years budget. This type of budget has a clear advantage when the limited resources are to be allocated carefully and objectively. Zero based budgeting takes more time to create as all pieces of the budget need to be reviewed by management.

Personal budget – A budget type focusing on expenses for self or for home, usually involves an income to budget.

The dictionary definition of budget at Wiktionary

Media related to Budget at Wikimedia Commons

Quotations related to Budget at Wikiquote

Origin of the word