Thursday, 14 July 2011

Budgets - Personal, Business and even Governments

Yesterday the NZ government announced this years budget.

But what is a budget and why do we have them?

You don’t build a house without first having a plan, so why build a business without a plan?

A budget is specifically a financial or money plan. In essence, a budget predicts where your business will be at a certain point in time - usually one year. It takes into account the timing of sales/income as well as purchasing for goods, including any assets or capital items.

There is no value in a budget unless you monitor and report your actual results to the budget plan. The picture this tells is a valuable tool in giving an idea of the trends and seasonal fluctuations of sales and expenses and shows the financial success in the short and medium term.

So drive your car looking forward rather than through the review mirror!

Visit us at http://www.devineaccounting.co.nz/

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