P2 Unit 10 Business

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Unit 2 – Task 10 Investigating Business Resources To: Spode’s casting shop From: Russel Williams Re: Casting shop budget What is budgeting and why is it important? Budget is a written down plan, usually expressed in monetary terms of what we hope will happens in the future. Budgeting is also known as the process of creating a plan to spend your money. Creating this spending plan allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do. If you do not have enough money to do certain things you would like to do, then you can use this planning process to prioritise your spending and focus on the money on the things that are most important to you. Once you create your first budget, you can begin to use it and get a good sense for how it can keep your finances on track. Doing this you can easily forecast which months your finances may be tight and which ones you will have extra money. You can then look for ways to even out the highs and lows in your finances so that things can be more manageable. Forecasting your budget gives you an idea how much money you will be able to save for important things like your vacation, a new vehicle, and an emergency savings account. Budgeting…show more content…
The reason organisation needs to control their costs properly would be that it would end up saving money on expenses and increase its revenue. This will help the company to increase its revenues and this would allow the company to invest more money if required. For example, the business should control its costs so that it saves money and by having the right amount of stock the business can then have the full benefits of selling those stocks and receiving cash which could be used for other areas of the business. In a business organisation, a budget represents an estimate of future costs and

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