Annual Budget

A budget prepared for a calendar or fiscal year, i.e., for a one-year time-frame. Laying down a yearly budget helps companies balance out the expenditure with the income/revenue they are looking at for the year.

Business Plan

A written document that describes in detail how a business defines its objectives and the way it aims to achieve them. It lays out a written roadmap from a marketing, financial, and operational standpoint.

Financial Management

Planning, analyzing, monitoring, and controlling an organization’s monetary resources. Responsibility for financial management often falls to the finance director and by extension, the finance department.

Revised Estimate

Revised Estimates are a mid-year review of possible year-end sales, revenue, and expenditure, taking into account the latest trend, market forecast, and past performance.

Long-Range Plan

Also known as Strategic Plan, is a way to identify what a company wants in the future and how they are going to get there. Long-Range Plan can range from anywhere between three-ten year time frame.


Price is the value that is put to a product or service. Pricing takes into account segments, ability to pay, market conditions, competitor actions, trade margins and input costs, amongst others. It is targeted at the defined customers and against the competition and is one of the most crucial parts of the budgeting exercise.

Zero-based Budgeting

A budgeting process that allocates funding based on program efficiency and necessity rather than budget history.

Activity-based Budgeting

A budgeting process where companies identify and analyze the activities that determine the cost of the company and, after that, prepares the budget based on the results.


The process of designating expenditure to each P&L Line item. The method of distribution identifies the maximum amount of funding an organization is willing to spend on a given item or program.

Budgetary Slack

The practice of under-estimating budgeted revenues, or over-estimating budgeted costs, to make budgeted targets more easily achievable

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Swati is a Chartered Accountant with 6 years of experience working with some of the biggest global brands. While her profession demands number-crunching, she is a story-teller at heart. She loves travelling and meeting new people. Connect with her on LinkedIn for stories and more!

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