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Bookkeeping All-In-One For Dummies by Consumer Dummies

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Chapter 2

Budgeting

In This Chapter

arrow Defining the benefits of budgeting

arrow Budgeting profit and cash flow

arrow Determining whether budgeting is worth it

arrow Keeping budgeting in perspective

arrow Staying flexible with budgets

A business can’t open its doors each day without having a pretty good idea of what to expect. And it can’t close its doors at the end of the day not knowing what happened. Recall the Boy Scouts’ motto: “Be prepared.” A business should follow that dictum: It should plan and be prepared for its future, and it should control its actual performance to reach its financial goals.

Business managers can wait for results to be reported to them on a “look back” basis, and then wing it from there. Or, they can look ahead and carefully plan profit, cash flows, and financial condition of the business, to chart its course into the future. The plan provides invaluable benchmarks; actual results can be compared against the plan to detect when things go off course.

Planning the financial future ...

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