Budgeting
Forecasts must be as dynamic as the business environment. That means it is not set in stone but will be routinely evaluated for necessary corrections. These sections will explain the importance of budgets and forecasting to the business. This material will enable you to explain the budgeting and forecasting process and discuss its benefits to the company.
7.3 Prepare Financial Budgets
Now that you have developed an understanding of operating budgets, let’s turn to the other primary component of the master budget: financial budgets. Preparing financial budgets involves examining the expectations for financing the operations of the business and planning for the cash needs of the organization. The budget helps estimate the source, amount, and timing of cash collection and cash payments as well as determine if and when additional financing is needed or debt can be paid.