Budget is a microeconomic concept that is employed by all organizations and businesses, be it large or small. No operation in an organization can proceed without a well-structured financial plan that details thoroughly on revenues and expenditures that achieve objectives. A budget also provides a comprehensive outline of the resources that will be used and purchased to finish a task. If designed properly and with minute details being taken care of, it is a company’s map to track the finances of any stage of operations and ensures that objectives are achieved as planned. An organization is closely aligned to its work as long as the budget is well in place.
Mapping a budget allows to keep an estimate and tracking finances using the budget gives liberty to expand the budget wherever needed and alter it. Wherever budget provides liberty, initiatives can be undertaken such as hiring new workers, investing in a new market or improving advertisement strategy. Not only this, but it is a structured budget that helps business owners decide about raise in salaries, bonuses, insurance plans for workers etc. The adjustments in new sales, overhead costs of operations and tax bills are all planned out as per a budget detailing an estimate of current expenditures as well as those of future. The importance of mapping a budget can perhaps be explained best by small business owners who operate their businesses on a tight budget and even a slight fluctuation in budgets can lead to huge disruptions and loss.
After having detailed on importance and benefits of having a budget, how to map a budget has to be discussed. To ensure an effective budget is put in place, it is best to hire an accountant or a person who excels at handling finances with accurate details. Such an individual will not only plan an effective budget but also track the finances at every stage along with producing concise reports so relevant people can change business strategy or future objectives keeping those in mind.
What cannot be denied is the role of technology in making the mapping of budget easier to structure. With details of every instant and expenditure, manual budget making is often an uphill task. But technology with its software makes it feasible to compartmentalize different aspects of budgets, such salaries, resources purchased and other divisions. This makes the budget easier to read, understand and analyze. Computerized budget aids in spotting the factors affecting the budget or causing fluctuations in it which in turn leads to making improvements instantly.
However, technology itself or one individual alone cannot be the driving force behind budget mapping. All the individuals in the organization who are a part of the on-going operations should be a part of the budget planning committee. Moreover, the budget should essentially reflect the key strategies an organization employs. The budget mapping committee should regularly track the budget to identify areas of weaknesses and strengths and build upon them to yield improved results. The committee must alter the budget as per the needs in case of a situation that requires an instant change.
