The Master Budget for a profit oriented organization seeks to build a set of interrelated budgets which provide a complete "picture" of the operations of the business over some future period, usually twelve months. The elements of the master budget address both operating and financial concerns. (Blocher, 2002).
It is not difficult to devise a master or overall budget. It is simply your realistic, long-term aspirations translated into total costs. So often, families consider only the cost for the item, when the item in question comes with accompanying repair or installation costs. For example, an air conditioner may require electrical, plumbing and installation expense. (www.debtfreebenefits.com).
Those "other" costs should be considered in establishing the financial impact on the family budget. Sometimes the incidental costs may be as great at the time as the major purchase itself. Good planning or budgeting usually avoids these mistakes. (www.debtfreebenefits.com).
After the long term objectives are established, each objectives must be put into annual terms. There are many questions to answer: When can you buy it, how much will it cost, do you pay it all now or can you spread the total costs over more than one year? (www.debtfreebenefits.com).
A master budget is simply the compilation of these major considerations put on the same page (s) so that the total picture for a lifetime, year, month, week or day can be properly reviewed and then adjusted when necessary. (www.debtfreebenefits.com).
A master budget does not have to be complex, but it ought to be complete. The path to success for the successful is almost always supported by a plan, a specific, written charting of the steps needed to accomplish the intended success. Success is not achieved by accident. Success is a planned event. (www.debtfreebenefits.com).
A firm's strategic plan describes how the firm matches its own strengths and weaknesses with the opportunities and threats in the marketplace in order to accomplish its long-term goals.