The budget cycle consists of four phases: (1) prepara- tion and submission, (2) approval, (3) execution, and (4) audit and evaluation. The preparation and submission phase is the most difficult to describe because it has been subjected to the most reform efforts.

The Budgeting Phase of the PPBE Process includes formulation, justification, execution, and control of an organization’s or program’s budget.

Budgeting: The Budgeting phase of the PPBE process includes formulation, justification, execution, and control of the budget. The primary purpose is to scrutinize the first one or two years of a program’s budget to ensure efficient use of resources.

Budget formulation is the process of determining the resources necessary for TIGTA to carry out its programs, perform its mission, and to achieve strategic objectives and goals. Finance coordinates with TIGTA’s functional units, Treasury, and OMB. The OMB; and. The Congressional Justification or The President’s Budget.

Let’s look at the different types of budget and how they contribute to drafting a business plan.

• Master budget.
• Operating budget.
• Cash budget.
• Financial budget.
• Labor budget.
• Static budget.
• Estimated revenue.
• Fixed cost.

Six steps to budgeting

1. Assess your financial resources. The first step is to calculate how much money you have coming in each month.
2. Determine your expenses. Next you need to determine how you spend your money by reviewing your financial records.
3. Set goals.
4. Create a plan.
5. Pay yourself first.
6. Track your progress.

5 Steps to Creating a Budget

• Step 1: Determine Your Income. This amount should be your monthly take-home pay after taxes and other deductions.
• Step 2: Determine Your Expenses.
• Step 3: Choose Your Budget Plan.
• Step 4: Adjust Your Habits.
• Step 5: Live the Plan.

A government budget is a financial document comprising revenue and expenses over a year. Depending on these estimates, budgets are classified into three categories-balanced budget, surplus budget and deficit budget.

• Step 1 – Establish Actual Position. All organisations have some form of an accounting system which records their income and expenditure.
• Step 2 – Compare Actual with Budget.
• Step 3 – Calculating Variances.
• Step 4 – Establish Reasons for Variances.
• Step 5 – Take Action.

“Optional” expenses are those you CAN live without. These are also expenses that can be postponed when expenses exceed income or when your budgeting goal allows for it. Examples are books, cable, the internet, restaurant meals and movies.

It begins by deciding upon the financial goals according to which the budget will be made. Other important activities in the budgeting process include things such as forecasting, monitoring, controlling and evaluating the financial goals. Budgeting process is very crucial for any business entity.

Budgeting, as a control tool, provides an action plan to ensure that the organization’s actual activities are least deviated from the planned activities. Budgets are used to give an overview of the organization and its operations.

How to prepare a master budget for your business

1. Step 1: Create your sales budget.
2. Step 2: Create a production budget.
3. Step 3: Create a materials budget.
4. Step 4: Create a direct labor budget.
5. Step 5: Create an overhead budget.
6. Step 6: Account for cost of goods sold.
7. Step 7: Create an administrative budget.

Limitations of Budgeting

• Inaccuracy.
• Time-Consuming & Costly.
• Rigidity.
• Excessive Spending.
• Scope for Manipulation.
• Allocation of Expenses.
• Financial Outcome Oriented.

To monitor expenditure, the types of information you need include:

1. budget for the area of activity for the full year and profiled for the year to date.
2. actual expenditure to date.
3. future expenditure commitments.
4. balance of annual budget remaining.
5. forecast outturn.

Governments need to carefully monitor all expenditures as well – including one-time uses and also examining key aspects of the following: Personnel….

• Electronic system.
• Automation.
• Overspend Protection.
• Consistency.

Budget Management Tips for New Managers

1. Invest the Time to Learn Right From the Start.
2. Manage Your Department Budget Like It’s Your Own Business.
3. Be a Team Player.
4. Track Your Expenses Monthly and Make Proactive Corrections.
5. Be Transparent and Involve Your Team.
6. Be Strategic.

The completed budgets are presented by the managers to their Executive Officers for review and approval. Justification of the budget request may be required in writing. In most cases, the manager talks with their administrative officers about budget requirements.

What is budget approval? In every organization, each department must set its own budget of projected expenses and revenues for the period. These budgets must be approved by the finance and leadership teams to make sure the numbers are in line with corporate projections and priorities.

Here are key things to know about Union Budget 2020-21 to be presented by Finance Minister Nirmala Sitharaman: The Union Budget is prepared by the finance ministry in consultation with other Union government ministries.