Explain the difference between strategic and operational budgets.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Explain the difference between strategic and operational budgets.
Strategic budget: A strategic budget is a long-term financial plan. It achieves the long-term goals of the company. Typically, strategic budgets are most often for 3 to 10 years.
Operating Budgets: A budget that consists of the total estimated cost of production or operation of the company. The operating budget helps the company to establish sales and production goals.
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