Accounting › Section T · Budgeting › Topic T.1
How and why managers budget
A budget turns a company's strategy into numbers for the months ahead: what it expects to sell, spend, borrow and earn. Knowing why budgets exist, and how the way they are built shapes behaviour, is the starting point for every budget schedule in this section.
In this topic
- From strategy to a plan in numbers
- Four jobs a budget does
- The master budget
- Top-down, bottom-up, or both
- Budgetary slack
- Worked example: slack and a bonus
- Incremental and zero-based budgeting
- Worked example: a travel budget two ways
- Static, flexible, and rolling budgets
- Worked example: rolling forward
- Common mistakes to avoid
- Key takeaways
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