Budget Manual

AAA

DEFINITION of 'Budget Manual'

A set of instructions used within large organizations to prepare budgets. As organizations become larger and more complex, it is no longer possible for one person to prepare a budget. Instead, budgeting across the enterprise must be carefully coordinated. Financial analysts work closely with each group to collect budget information on a pre-set schedule and then send data up through higher rungs of financial controllers until it can be aggregated by the CFO's office.

INVESTOPEDIA EXPLAINS 'Budget Manual'

Budgeting within large organizations is an extremely complex task. Financial analysts must make assumptions about what the future will look like based on past data. This means that even the best budgeting process is subject to considerable inaccuracies. Then, as the year progresses, each group is held to a predefined budget, which may become inadequate due to changing conditions. On the other hand, some groups will find that they have more money than they require, and may choose to surreptitiously use up the "extra" budget with unnecessary expenditures in order to avoid budget cuts.

RELATED TERMS
  1. Blanket Appropriation

    Expenditures that are authorized on a blanket basis, without ...
  2. Accounting Manual

    A manual that contains pertinent accounting rules and other information ...
  3. Budget Planning Calendar

    A schedule of activities that must be completed in order to create ...
  4. Budget Committee

    A group of people that creates and maintains fiscal responsibility ...
  5. Zero-Based Budgeting - ZBB

    A method of budgeting in which all expenses must be justified ...
  6. Capital Budgeting

    The process in which a business determines whether projects such ...
RELATED FAQS
  1. How does transfer pricing help business?

    Transfer pricing involves the trade of goods or services between two related companies, and both can come out the winner. ... Read Full Answer >>
  2. How do I calculate my effective tax rate using Excel?

    Your effective tax rate can be calculated using Microsoft Excel through a few standard functions and an accurate breakdown ... Read Full Answer >>
  3. How important are contingent liabilities in an audit?

    Contingent liabilities, when present, are very important audit items because they normally represent risks that are easily ... Read Full Answer >>
  4. How does quantifying fixed overhead volume variance show whether a company is profitable ...

    Fixed overhead volume cannot definitively prove a company is profitable, but it can be used to provide an excellent indication ... Read Full Answer >>
  5. What does inventory turnover tell an investor about a company?

    The inventory turnover ratio determines the number of times a company's inventory is sold and replaced over a certain period. ... Read Full Answer >>
  6. What is a deferred tax liability?

    A deferred tax liability is an account that is listed on a company's balance sheet and occurs when its taxable income is ... Read Full Answer >>
Related Articles
  1. Options & Futures

    Bloated Budget? How To Trim The Fat

    Blood, sweat and tears should belong in the gym, but your money deserves some training time too.
  2. Budgeting

    6 Months To A Better Budget

    Can you have perfect abs in just six minutes a day? Maybe not, but you can have a rock-solid budget in six months.
  3. Budgeting

    The Beauty Of Budgeting

    Make it to the end of the month, before you run out of money.
  4. Entrepreneurship

    Run Your Finances Like A Business

    Think of yourself as your own little company. To make it run smoothly, you need to take a look at your books.
  5. Budgeting

    How Budgeting Works For Companies

    Learn how to break down and understand a corporate budget.
  6. Economics

    Explaining the Cash Budget

    A cash budget is a plan for the inflows and outflows of cash for a business or an individual.
  7. Budgeting

    10 Worst And Best Vacation Cities In The U.S.

    The many costs of planning a vacation will put a stress on most people’s finances, but where you choose to go can be what really makes your travel budget.
  8. Economics

    What are Noncurrent Assets?

    Noncurrent assets are property that a company owns that will last for more than one year.
  9. Investing Basics

    How Much Do CPAs Make?

    If you're considering becoming a CPA, here's what you might expect to earn.
  10. Budgeting

    Top 6 Money Management Apps For 2015

    Spenders who should be keeping better track of their cash flow will benefit the most from these money management apps.

You May Also Like

Hot Definitions
  1. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  4. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  5. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  6. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
Trading Center