Key points

• Budgets are much more than an arithmetical exercise - they are a fundamental element of the important management functions of planning and control.
• The best way to get an accurate forecast is to study the past performance of the organisation and identify future trends.
• All organisations need systems for authorising expenditure.

Checklist

• Do you understand the concepts of budgeting and forecasting?
• Are you carefully monitoring your income and expenditure?
• Have you established procedures for financial control e.g. cheque signing?