Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Build it bottom-up
Start with realistic revenue projections — by product, client or month, grounded in your pipeline and history, not hope. Then lay out fixed costs (rent, salaries, subscriptions) and variable costs (that move with sales). The gap is your projected profit, and from the timing you derive your cash needs. Tie it to your goals for the year.
The budget is a control tool
A budget’s real value isn’t the forecast — it’s the monthly comparison of actuals against budget (variance analysis), which shows where you’re over- or under-performing and prompts action. Revisit and re-forecast as reality unfolds. A budget filed away and never compared is wasted effort. Keep it realistic — an over-optimistic budget is useless as a control.
A worked example
Example: a business budgets ₹2 crore revenue and ₹1.6 crore costs for the year. By Q2, the monthly variance review shows revenue 15% behind but marketing spend on plan — so it adjusts spend and targets before the year is lost. Run without a budget, it would have noticed only at year-end. The discipline of plan-then-compare is the point. Our team can build your budget and run the monthly variance review.