Budget Manual

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.

BREAKING DOWN '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. Annual Budget

    Any budget that is prepared for a 12-month period. An annual ...
  2. Budget

    An estimation of the revenue and expenses over a specified future ...
  3. Budget Planning Calendar

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

    A budget that reflects the input of resources and the output ...
  5. Balanced Budget

    A situation in financial planning or the budgeting process where ...
  6. Zero-Based Budgeting - ZBB

    A method of budgeting in which all expenses must be justified ...
Related Articles
  1. Budgeting

    How Budgeting Works For Companies

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

    Explaining the Cash Budget

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

    3 Alternative Budgeting Styles: Which One Suits You?

    Not everyone is cut out for online or heavily-involved budgeting. Here are some budgeting solutions.
  4. Professionals

    Budgeting Your Small Business

    Budgeting helps small businesses determine if they have enough money to fund operations, expand and generate income.
  5. Economics

    How Budget Deficits Work

    How do governmental and business budget deficits function?
  6. Options & Futures

    Top 5 Budgeting Questions Answered

    You don't need a degree to understand your money, begin saving and pay down debt.
  7. Investing

    Explaining Clients Why They Need a Budget

    The truth is that budgeting isn't just for times when your money is tight or your life is undergoing a major transition. Budgeting is for everyone, rich and poor alike.
  8. Budgeting

    What's Your Idea Of Budgeting?

    Is your idea of a budget simply spending till your checking account is nearly empty? Or worse, till your credit limit is exhausted?
  9. Savings

    10 Ways To Budget When You’re Broke

    Budgets are some of the best financial tools around – when planned properly and followed faithfully.
  10. Budgeting

    What is Zero-Based Budgeting?

    Zero-based budgeting starts from a "zero base" and then every function within an organization is analyzed for its needs and costs.
RELATED FAQS
  1. What's the difference between budgeting and financial forecasting?

    Learn about financial budgeting and financial forecasting and the main differences between the two management decision-making ... Read Answer >>
  2. How does a nation's national debt affect the budget process?

    See how the national debt has traditionally impacted, or purported to impact, the budgeting process for the U.S. federal ... Read Answer >>
  3. Why would a company choose to operate on a deficit budget in lieu of a balanced budget?

    Learn how companies can strategically use deficit budgets in the short term to get off the ground, expand and work through ... Read Answer >>
  4. Why should I bother creating a budget?

    Creating and using a budget is a valuable tool for all demographics; it's not just for those who need to closely monitor ... Read Answer >>
  5. What is the best software for calculating the cash budget of an individual?

    Explore the options and features of several leading personal finance tools to find the best software for calculating your ... Read Answer >>
  6. Is there a difference between the cash budget and a credit budget?

    Learn more about how cash flow is detailed in cash budgets and how credit budgets work. Find out what these budgets reveal ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  6. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center