Financial budget


A financial budget is a document that tries to highlight the economic situation of a company during a certain period.

That is, this budget is responsible for monopolizing each and every one of the aspects that may arise at the economic level of a company. Some of these are the fiscal or financial, among others.

Characteristics of a financial budget

Although a budget is a document whose main purpose is to presuppose a series of expenses and income in a specific subject or department, we must also take into account the following characteristics:

  • Duration: There is a general convention that any budget, with exceptions, has a duration of 1 year.
  • Objective: The goal of this budget is to have a control and an objective at the end of the year based on forecasts of expenses and income, along with a series of anticipated financial needs.
  • Disciplines to take into account: All economic facets can be covered, whether at the fiscal, financial, treasury and cash flow levels.
  • Responsible department: Normally the responsible departments are administration and accounting.
  • Typology: This budget is short-term, private, flexible and follows an estimation methodology.

Taking into account the aforementioned characteristics, it can be affirmed that the financial budget is a fundamental part in the strategic planning of the company, along with the marketing and human resources (HR) area.

Types of financial budget

Within a budget such as the financial one, several areas can be divided, which are:

  1. Operational area.
  2. Treasury area.
  3. Capital area.

As we can see, we can convert these three areas into an even more specific budget, which are normally attributed in short to operating, treasury and cash flow budgets, in addition to capital, respectively.

Financial budget example

Assuming that the following example is going to be presented in a simplified way, the budget line table would be:

Operational area1st trimester2nd Trimester3rd trimester4th TrimesterTotal
Gross profit7.0003.0009.0001.00020.000
Net profit6.0002.0008.00050016.500
Treasury Area1st trimester2nd Trimester3rd trimester4th TrimesterTotal
Initial treasury2.0001.6001.7002.6007.900
Final treasury1.6001.7002.6002.2001.600
Capital Area1st trimester2nd Trimester3rd trimester4th TrimesterTotal
Inv. Circulating9001.0009002.400
Inv. To make20002.00002.200
Inv. Overdue-100-100-5000-600
Inv. Final1.0009002.4002.400

Exposed the previous tables, you can see budgets calculated for one year, divided on the basis of quarters. It should be noted that a budget does not only have a series of tables and calculations, but is accompanied by comments, clarifications, forecasts and warnings to take into account at a theoretical level.

On the other hand, it should also be mentioned that each company has certain needs and each sector has its characteristics, which makes a budget vary in its preparation and content according to the objective and the type of company that carries it out.

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