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BUSINESS GLOSSARY 2022 SERIES

BUSINESS BUDGETING

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DEFINITION

BUDGETING IS A FINANCIAL ROAD MAP THAT BALANCE  EXPENSES WITH INCOME.

A SPENING PLAN BASED ON THE INCOME & EXPENSES.

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BUDGETING METHODS

INCREMENTAL

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ACTIVITY BASED

VALUE PROPOSITION

ZERO BASED

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INCREMENTAL BUDGET

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THIS BUDGET METHOD REFER TO THE LAST YEAR'S ACTUAL AND THEN ADDS OR SUBSTRACT TO GET THE CURRENT YEAR'S BUDGET.

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IT IS AN ACTIVITY ORIENTED BUDGET, WHICH MEANS WHAT INPUT IS REQUIRED TO GET THE DESIRED OUT PUT IN FINANCIAL TERMS.

ACTIVITY BASED

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IT IS ALSO CALLED PRIORITY BASED BUDGETING. IT TRY TO JUSTIFY THE VALUE OF EVERY SINGLE EXPENDITURE.

VALUE PROPOSITION

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IT IS A METHOD OF DEVELOPING A BUDGET FROM SCRATCH EVERY TIME [STARTING FROM ZERO]. IT JUSTIFY EACH EXPENSES BEFORE ADDING INTO BUDGET.

ZERO BASED

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EFFECTIVE USE OF MONEY.

WHY BUDGETING IS IMPORTANT?

PROPER ROSOURCE ALLCATION.

MONITORING.

HELPS FUTURE PLANNING.

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THANKS FOR WATCHING

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