Budgeting is a Short-Term plan for your business based on revenues and expenses. It identifies your available capital, estimates your spending, and helps you predict revenue.

A budget can help you plan your business activities and can act as a measure for setting up financial goals. It can help you tackle both short-term obstacles and long-term planning.

Budget acts as a financial blueprint, detailing projected income and expenditures over a defined timeframe, usually monthly or annually. It provides guidance for financial management, resource allocation, and goal attainment.

Budgeting entails forecasting future income and expenses and strategizing the optimal allocation of funds. Through ongoing monitoring and comparison to the budget, entities can focus on areas of overspending, implement necessary adjustments, and adhere to financial constraints. Ultimately, budgeting serves as a cornerstone for sustaining financial well-being and realizing enduring fiscal goals.

For the execution of goals,efficient planning of these activities is very important and that is why the management has a crucial role to play in drawing out the plans for its business. Various activities within a company should be synchronized by the preparation of plans of actions for future periods. These comprehensive plans are usually referred to as budgets. Budgeting is a management device used for short‐term planning and control. It is not just accounting exercise.

Effective budgeting plays a significant role in achieving a positive cashflow. It allows businesses to anticipate their needs, allocate resources efficiently, and prepare for any potential financial challenges.