Budgets are designed to carry out a number of functions within a business, such as planning, evaluating performance, coordinating activities and in larger companies, communicating, motivating and authorizing actions. For a business to maintain control it needs to produce annual budgets that can be monitored against actual performance. 

There are three components to a budget - the Profit and Loss, Balance sheet and Cash flow statements.

This page outlines the approach taken in preparing company budgets - click on the links below if you wish to go to a particular section.