Budgeting

Budgeting is similar to forecasting in that it lays the foundation for the financial management of a business. In many cases, a forecast and budget can be the same document. A budget tells you what to spend, where, and how much. It helps to ensure that you are not spending too much in one area and too little in another based on the direction the company is headed. The failure to follow a budget is one of the fundamental sources of cash flow problems, growth problems and overall financial management failures.