A budget is a financial plan for a defined period. It helps organisations allocate resources, control spending, plan for growth, measure performance against targets, and make informed financial decisions.
Common types: Static budget (fixed, doesn't change), Flexible budget (adjusts with activity levels), Zero-based budget (every expense justified from scratch), Incremental budget (based on previous period), and Activity-based budget (based on activities driving costs).
Step 1: Review historical financial data.
Step 2: Estimate revenues and income.
Step 3: List all expected expenses by category.
Step 4: Allocate funds to each department or project.
Step 5: Include contingency reserves (5-10%).
Step 6: Get approval from management.
Step 7: Monitor and adjust monthly.
Step 2: Estimate revenues and income.
Step 3: List all expected expenses by category.
Step 4: Allocate funds to each department or project.
Step 5: Include contingency reserves (5-10%).
Step 6: Get approval from management.
Step 7: Monitor and adjust monthly.
Compare actual results against budgeted amounts monthly. Calculate variances as percentages. Investigate significant variances (typically >5%). Identify root causes and take corrective action. Document lessons learned for future budgets.
Download our free bilingual budget templates with pre-built categories, auto-calculated totals, variance columns, and chart-ready data. Available in Excel and Google Sheets formats.