Budget is a basic financial plan that includes a list of planned income and expenditure. The budget is part of the financial plan and helps in planning to achieve financial goals. It can be compiled at the state level, organizations, entrepreneurs, projects, families or individuals (family budget).
Budget in practice: The budget is usually set for a year and it is formed from the “bottom” by summing of the budgeted items. From its result it is clear whether the organization will be in deficit (budget deficit) or profit (budget profit) or the budget will be balanced. If an organization doesn’t want to be indebted in a long run, the budget should be created as profitable. The organization or entrepreneur can achieve it by either increasing revenue or reducing expenses. CFO has the responsibility for setting the budget.