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The Importance of Business Budgeting

  Arthur F. Rothberg, Managing Director, CFO Edge, LLC  
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  Article Summary  
It’s critical that executives work together with other key members of the management team to create a business budget that defines the company’s basic financial structure and how cash will be managed to work within this structure. Business budgeting helps reduce the uncertainty that often accompanies expense and cash flow forecasting, providing executives with a fiscal framework for all of the company’s financial decisions.

This article reviews the elements of business budgeting including the sales forecast, cash flow forecast, fixed expenses, variable expenses, capital expenditures (CAPEX), as well as the primary benefits gained implementing business budgets.

California business leaders who haven’t taken the time to perform basic business budgeting should make this a top priority. A well-planned budget will provide the framework for all of the company’s major financial decisions. Without this framework, such decisions may be plagued by uncertainty and inaccuracy. An outsourced CFO services provider can provide invaluable assistance in the business budgeting process by helping you forecast your sales and cash flow and identify all of your expenses: fixed, variable and capital.

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