How to make a budget

Two methods: regular budget and continuous budget.

(1) Regular budget: In this budget, a plan with the least time change is made for the next fiscal year. Generally speaking, the expected total cost of each year is allocated monthly and according to the activity advantage of the factor cost of the whole year. In this way, the monthly "salary" is simply allocated to each month as112 of the expected cost, and the seasonal fluctuation of sales needs to pay more attention to the marketing and production costs and the cost changes during the fluctuation.

(2) Continuous (rolling) budget: In this kind of budget, a tentative annual plan is prepared, in which the first quarter is detailed monthly, the second and third quarters are relatively simple, while the plan for the fourth quarter has only a rough outline, and the budget should be revised every month (or maybe every quarter) to add the details needed for the next month (or quarter).

And add a new month (quarter), so that the plan will be extended to one year. This program chart of budget conforms to the change of environment and the influence of some uncertain factors, which is very ideal. Because it forces managers to constantly consider the specific situation of the new year no matter what stage they are in the current fiscal year.

Extended data:

What does the budget include:

(1) is used to specify the scheme budget (activity budget) of various future operations. For each marketing plan, the most reasonable way to express this budget is to list the expected income and related costs. The result of this is an objective description of the expected future, which helps to ensure a balance between various activities, profitability and sales volume. In other words, this is the plan (see the picture below).

(2) Explain the responsibility budget of the annual plan according to personal responsibilities. This is basically a control tool to show the target performance level, but the personalized cost in this budget must be controllable at the level of planning and reporting.

Responsibility budget chart

These two programs dealing with activity budget are of great significance, because the program budget is the result of the planning stage, and the responsibility budget is the starting point of this control stage. The former method does not need to conform to the organization, and the latter method must correspond to the organization. Therefore, before the plan is implemented, it must be turned into control, and relevant personnel should be informed so that everyone can understand their respective responsibilities.

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