What is an 'Administrative Budget'

An administrative budget is 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 is 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.

To measure managerial effectiveness and financial performance administrative budgets are often analyzed for trends or patterns. A popular technique compares the plan (or budgeted) to actual business results. Here, a business analyst can identify what is working and what isn't. In theory, management can then allocate resources to their most effective uses.

No two administrative budgets are the same. Their content and composition will change with business conditions and the needs of parties reviewing them. Large organizations, such as the State Department will have administrative budgets that are far more sprawling than a monoline agency's, such as the Army Corps of Engineers.

RELATED TERMS
  1. Balanced Budget

    A balanced budget is a situation in financial planning or the ...
  2. Budget Manual

    A budget manual is a set of instructions used by large organizations ...
  3. Budget Planning Calendar

    A budget planning calendar is a schedule of activities that must ...
  4. Budget Committee

    A budget committee is a group of people that creates and maintains ...
  5. Administrative Accounting

    Administrative accounting handles and reports internal factors ...
  6. Zero-Based Budgeting - ZBB

    Zero-based budgeting (ZBB) is a method of budgeting in which ...
Related Articles
  1. Personal Finance

    10 Reasons People Don’t Create a Budget

    Don't avoid putting together a budget, an essential part of a personal financial plan, for these reasons.
  2. Personal Finance

    Here's How to Create a Successful Budget

    Break your expenses into needs, wants, and savings goals for a budget plan you can stick to.
  3. Personal Finance

    Why It’s Essential to Create a Budget for Yourself

    Budgeting may sound elementary, but it is the cornerstone of sound fiscal management.
  4. Personal Finance

    5 Steps Toward Creating an Effective Budget

    Creating a budget can seem daunting, but it doesn't have to be. Use these five steps to create an effective budget you can live with.
  5. Personal Finance

    How to Create a Budget You Can Stick With

    Following a budget can be difficult. But it’s usually the difference between living a stressful retirement versus the retirement of your dreams.
  6. Personal Finance

    How to Create a Budget You Can Actually Stick With

    Following these five steps can help you create a budget that you can stick with.
  7. Personal Finance

    3 Types of Budgeting Styles for The Undisciplined

    Not everyone is cut out for online or heavily-involved budgeting. Here are some budgeting solutions for the financially undisciplined and inexperienced.
RELATED FAQS
  1. How do budgeting and financial forecasting differ?

    Budgeting helps management members set expectations for where they want their company to go and financial forecasting measures ... Read Answer >>
  2. What are common concepts and techniques of managerial accounting?

    Understand the difference between managerial accounting and financial accounting. Learn about the common concepts and techniques ... Read Answer >>
  3. When is managerial accounting appropriate?

    Understand the difference between managerial accounting and financial accounting, and learn common scenarios in which managerial ... Read Answer >>
  4. What are general and administrative expenses?

    General and administrative expenses are not directly attributable to the production of goods and services and include audit ... Read Answer >>
  5. What are the different types of operating expenses?

    Learn about the different types of operating expenses and how they impact companies. Some are fixed costs while others are ... Read Answer >>
Trading Center