The Budget is a forecast of your income and expenses with the indication of the category. The Budget will allow you to check that your outgoings do not exceed your income and, where necessary, avoid expenses.
In order to make a proper budget you will have to write down type of income you think you will have and all fixed and extra expenses at the beginning of every year. By predicting your expenses and income you will have a very clear vision from the beginning and a greater control over your money that will allow you to plan and optimize your savings in order not to spend more than you have. With the budget you will be able to compare your forecasts with the real evolution of your money in order to correct your expenses in case you spend your money improperly.
Cash Flow Forecasting
Through the budget you can see the future balance (expected evolution of the liquidity balance). In fact, Banana will also allow you to enter the date of your registrations, which will allow you not only to plan and optimize your expenses, but above all to know in advance a possible lack of money and avoid unnecessary expenses. In view of a more substantial expense, such as a new phone, you will be able to predict when and how much money you will need to have to afford this expense.
It is the recording of a prediction movement. For example, you record the movement that concerns the income from your salary in the bank account, or you record the movement that concerns the rent of the year that you pay with the bank account.
The planning period is the period for which the planning values are given.
It indicates the period for which the forecast is prepared. It may be different from the planning period.
The financial development of a company serves to keep track of the development of accounts in the future. In Banana Accounting you can have a view of this evolution thanks to the Budget chart at the bottom of the Accounts Table.
When a company develops its business plan, it needs to know how much liquidity it will need so that costs do not exceed revenues. The financial plan will therefore estimate the expenses that the company will have to incur over a specific period of time, for example for the next 3 years. The ultimate goal is to assess whether the company will be able to manage costs and, if not, to change its financial strategies.
Forecast balance sheet
The forecast balance sheet is a document that shows the forecasts for a future period of a company and concerns the balance sheet accounts (Assets and Liabilities).
Forecast Profit and Loss Account
The forecasted profit and loss account is a document that presents a summary of costs and revenues with the result for the year, forecast for the future. It is an important business management tool because it allows you to understand how the situation will evolve from an economic point of view.
Comparison of budget and final balance sheet
The comparison between the final balance sheet and the budget is used to evaluate the earnings and the budgeted expenses in relation to the actual ones. In this way, strategies can be implemented for the following year. Banana allows you to compare the budget and the final balance in a single document.