Instructions:

Creating Your Personal Budget For this assignment, you will apply what you have learned in this unit to a small business. To get the business’s finances under control, you need to prepare a budget. You may consider items from your personal finances and cash flow to help you identify possible expense items for the small business budget. Research the CSU Online Library or the Internet for steps to creating a personal budget. Monthly expenses might include rent, utility costs, personal loans, car loans, credit cards, groceries, childcare, vehicle maintenance costs and insurance, phone charges, and cable or streaming costs. Cash flow considerations might include monthly salaries, commissions, and allowances. You can use any budget format that you are comfortable with, or you may select a free template. Your budget should be completed using Excel. Once you have completed your budget, in a separate Word document, address the information below.

• How can the use of the budget be used in the planning process?
• How can this financial information influence short-term and long-term decisions?
• Based on your personal budget, what are your static expenses? What are your flexible expenses?
• As an accountant, reflect on how you can use what you have learned in this activity in the workplace.

Your submission should include one Excel document, which contains your budget, and a one-page Word document, which contains your responses to the prompts above. You should include at least two resources to support your responses. Adhere to APA Style when creating citations and references for this assignment.

Assignment Preview:

Creating a budget can be a useful tool in the planning process for a small business as it allows the business to forecast its expected income and expenses. By comparing the two, the business can determine if it is generating enough revenue to cover its expenses and potentially make a profit. A budget can also help a business identify areas where it may be able to cut costs or increase revenue.

The financial information contained in a budget can influence short-term and long-term decisions made by a business. For example, if a business’s budget shows that it is consistently spending more than it is earning, the business may need to make some short-term changes, such as reducing expenses or increasing revenue, in order to improve its financial situation. In the long term, the business may need to make more significant changes, such as restructuring its operations or seeking outside funding, in order to become financially stable.

In a personal budget, static expenses are those that remain the same from month to month, such as rent or a car loan payment. Flexible expenses are those that can vary from month to month, such as groceries or entertainment costs. It is important to track both types of expenses in a budget in order to get a complete picture of one’s financial situation.

As an accountant, the skills and knowledge gained from creating a personal budget can be applied in the workplace in several ways. For example, an accountant may use budgeting techniques to help a business create a financial plan or to forecast its financial performance. An accountant may also use budgeting to identify potential financial risks or opportunities for a business and to make recommendations for improving the business’s financial performance.

References:

• National Council on Nonprofits. (n.d.). Why is budgeting important? Retrieved from https://www.councilofnonprofits.org/tools-resources/budgeting-importance
• Small Business Administration. (n.d.). Budgeting and financial management. Retrieved from https://www.sba.gov/business-guide/plan-your-business/budgeting-financial-management

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