Convenience

Table 14.1
Developing Budgets in Organizations
Types of Budget
What Budget Shows
Financial Budget
Sources and Uses of Cash
Cash flow or cash budget
All sources of cash income and cash
expenditures in monthly, weekly, or daily
periods
Capital expenditures budget
Costs of major assets such as a new plant,
machinery, or land
Balance sheet budget
Forecast of the organization’s assets and
liabilities in the event that all other budgets
are met
Operating Budget
Planned Operations in Financial Terms
Sales or revenue budget
Income that the organization expects to
receive from normal operations
Expense budget
Anticipated expenses for the organization
during the coming time period
Profit budget
Anticipated differences between sales or
revenues and expenses
Nonmonetary Budget
Planned Operations in Nonfinancial Terms
Labor budget
Hours of direct labor available for use
Space budget
Square feet or meters of space available for
various functions
Organizations use
various types of
budgets to help
manage their control
functions. The three
major categories of
budgets are finan-
cial, operating, and
nonmonetary. There
are several different
types of budgets in
each category. To be
most effective, each
budget must be
carefully matched
with the specific
function being
controlled.
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Part 5:
Controlling
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overall budget for the organization, as well as specific budgets for each operating unit.
These decisions are then communicated back to each manager.