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4.2 Explain How To Manage A Budget

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4.2 Explain How To Manage A Budget
4.1 Explain the Uses of a Budget

A budget is a plan based on estimated income and expenses. It enables the business to operate within its means and plan for the future. A budget is usually drawn up for each financial year and the actual performance of the business can be measured against it. Different budgets can be created depending on the needs of a particular business. The most common would be operated at line manager level and be for a particular purpose i.e. stationary.

4.2 Explain how to Manage a Budget

Budgets should be carefully managed and responsibilities need to be carefully defined, actual performance should be monitored against projected performance. It is important to monitor spend against the budget. If there is an overspend
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