The budget forecast is an essential financial tool for any company management strategy. It is presented in the form of a quantified document listing in detail the company’s expenses and revenues during a defined period. Among other items, expenses correspond to purchases of raw materials, materials, taxes and duties.
External expenses, such as advertising costs and structural expenses, including rent and maintenance costs, are also part of the company’s expenses. Other expenses include personnel expenses, financial expenses such as agios, and extraordinary expenses such as fines and penalties. Revenue is the projected income of the business. This is usually the company’s sales revenue and any grants it will receive.
The budget forecast improves the management of the company. It allows us to see if the budget reality corresponds to the forecasts made. In this way, managers will be able to establish effective strategies for balancing expenses and revenues and, eventually, generate a margin.