Strategic Planning
The process of identifying goals, objectives and plans to achieve objectives. This is typically an analysis, evaluation and prioritization exercise.Estimates
Budget planning requires estimates of revenue, costs and risks. Revenue may be estimated for business units or an entire firm. Costs are modeled for each expenditure. Risks are estimated for each major optional expenditure to support decision making.Capital Budget
A capital budget is a plan to invest in an organization to improve the future. This represents the most strategic and flexible part of a budget. It is common to evaluate return on investment and risks for all capital expenditures as part of the budget processes. This may be presented in a business case for each proposed capital expenditure. Businesses may only select a small percentage of projects proposed by various business units and operations teams.Operating Budget
Known expenses and expected future costs related to operating the business including overhead such as human resources and operations functions such as factories. It is common to use last year's operating budget as a reference or baseline. Many operating costs are based on estimates for revenue and business activities such as customer support volumes.Cash Budget
Planning the cash inflows and outflows of an organization to ensure liquidity. Based on the operating budget, capital budget and estimates of revenue and when it will be received.Budget Controls
Implementing the budget with controls such as approvals, monitoring and accounting processes.| Overview: Budget Planning | ||
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Definition | The process of developing a budget for an organization, department, team, program, project or initiative. | |
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