Administrative Budget

DEFINITION of 'Administrative Budget'

An official, detailed financial plan for an upcoming period for a business. An administrative budget is usually prepared on an annual or quarterly basis and identifies the costs of running an operation that are not tied to producing a product or service. Costs can include those associated with non-production and supervisory payroll, depreciation, amortization, consulting, sales, dues and fees, legal fees and marketing, rent and insurance. The budget enables management to exercise control of the day-to-day activities of the business.

BREAKING DOWN 'Administrative Budget'

An administrative budget deals with the administrative side of running a business. Non-production payroll may include sales staff, accounting personnel, managers, clerical staff and other support staff members not involved in production. An administrative budget is a formal breakdown of all planned expenses, allowing managers to make estimations and measure progress.

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RELATED FAQS
  1. What is the difference between an operational expense and an administrative expense?

    An operating expense covers the production and marketing of products and services, whereas an administrative expense covers ... Read Answer >>
  2. What's the difference between budgeting and financial forecasting?

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  3. What are some examples of general and administrative expenses?

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  4. How does a nation's national debt affect the budget process?

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