Proper maintenance of finance is very essential for the success of a business enterprise. After starting a business firm, it is your duty to map and supervise its financial position. Budgeting is the most efficient tool, which keeps your business and its finances at right path.

A budget is a statement of expected results expressed in numerical terms. It is prepared in advance for the particular period to which it applies. It is an instrument of planning as well as control. It controls your finances for achieving present and future objectives.

Budgeting can be defined as, “Budgeting is the process of predicting and controlling the spending of money within the organization and consists of a periodic negotiation cycle to set budgets (usually annual) and the day-to-day monitoring of current budgets.”

A budget delineates your future spending and the way to finance that spending. Budget serves as a standard against which actual performance can be compared. It is prepared for definite period of time into the future and it expresses everything in precise numerical terms. Budgets elucidate programmes and determine the steps to be taken to achieve goal. The main features of a budget are as follows: