Budgeting is an integral part of society. Each day we try to budget our time, our meals, our kids' time and our money. Most of this process is done mentally and never put on paper. Just as families budget time and money, your business must also develop a financial plan. This type of budget is simply a formal written summary of your goals and intentions in terms of dollars.
There are several types of budgets with which you may be familiar, such as: the negative Federal Budget, the "try to break even" budget and the "I'm going to make a profit" budget. Since you are starting your business for the purpose of generating a profit, we will concentrate on this profit motive. A good accounting system makes a significant contribution to your management process. Keeping track of the historical data, cost relationships and various overhead items will help you make the proper management decisions. Accounting will translate your business plans into measurable financial goals.