budget planning

What is meant by budget planning?

Budget planning is the process of setting financial goals and allocating resources for a specific period, usually for a fiscal year. It aims to forecast revenues and expenses, set financial goals, establish budgets, and control spending. Effective budget planning allows businesses and organizations to manage their financial health, maintain liquidity, and achieve long-term strategic objectives.

Typical features of software in the budget planning area include:

1. Budget Creation: Creating budget plans for revenues and expenses based on historical data, forecasts, and business goals.
2. Financial Forecasting: Forecasting revenues, expenses, and financial metrics for future periods.
3. Resource Allocation: Allocating financial resources to various cost centers, projects, or departments according to strategic priorities.
4. Scenario Analysis: Performing "what-if" analyses to examine the impact of different assumptions and scenarios on the budget.
5. Budget Monitoring: Monitoring and controlling actual financial performance compared to the planned budget.