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Steps in the Process of Budgeting

BY: David Prakash Kumar | Category: Finance | Submitted: 2010-03-01 11:30:39
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Article Summary: "There are various steps in the process of budgeting. Read in this article, the various steps that will help you to make a wonderful budget..."

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Budgeting is an important part of every activity. There are many people who have various financial problems because of the lack of proper budgeting. Life is simple if the budgeting becomes a routine activity in every person's life. Many people think that budget is needed for the country and for big organizations. This is true to an extent and these cannot function without a budget because it will create chaos. At the same time, budget should also become an integral part of each of our lives to make life simple for us.

There are various steps that are part of the process of budgeting. The various steps in this process are all listed in detail in the article here. These steps will ensure the smooth process of the budget.

1. Assessment of what needs to be covered in the budget:

The initial step in the budget either for the individual needs, family or for the whole organization is for the individual to assess the various factors that need to be covered in the process of budget. This means that there will be various income and expenditures that occur over the period of time. All these have to be factors in while a budget is being prepared. This will help to have a smooth budget process and will prevent sudden expenditure in the middle of the year that has not been budgeted for.

2. Planning for the year ahead:

The next step that is important in the process of budget. The reason for this is that the whole year has to be taken into account while planning for the year ahead. The various likely expenditures and the income should be considered by the individual to make sure that everything goes according to the needs. It is very important not to miss anything while in the planning phase as it will make it difficult in the implementation phase.

3. Implementation of various plans of the budget:

The next step in the process of the budget is to make sure that the various plans in the budget are all implemented. This is a very important phase because only when the plans are implemented will the budget be useful for the individual or for the community.

4. Evaluation of the plans and reassessment:

The various plans that have been made at the start of the year need to be looked at in regular intervals. The reason for this is that only when one is able to look at all the details and evaluate the plans will the various short comings be identified. This is very important because once the short comings are identified, it will be easy to make a reassessment. This again will help the individual in making the needed corrections to make a new budget that is very useful for the next fiscal year.

These are the various steps that are needed in the preparation and implementation of a budget. These will help to make sure that the whole process is smooth and all the activities go on without any glitches due to lack of funds.

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