Phases of budget

Here are the typical phases of the budgeting process: 1. Preparation/Planning: This initial phase involves setting the overall strategic goals and objectives for the budget period. It includes gathering economic forecasts, defining key assumptions, and establishing guidelines for budget preparation. 2. Formulation/Development: Department managers or budget holders develop detailed budget proposals based on the established guidelines. This involves estimating revenues and expenses for their respective areas. 3. Review and Negotiation: The proposed budgets are reviewed by higher management or a central budget committee. This stage often involves negotiation to reconcile departmental requests with the overall financial objectives and available resources. 4. Approval: Once reviewed and adjusted, the final budget is formally approved by the designated authority (e.g., CEO, board of directors, or legislative body). 5. Implementation and Monitoring: The approved budget is put into action. Throughout the budget period, actual performance is tracked against the budget, and variances are analyzed. 6. Evaluation and Control: At the end of the budget period, the actual results are compared to the budget. This evaluation helps assess performance, identify reasons for variances, and inform the planning for the next budget cycle. 4 done, 1 left today. What's next?