Read article below. Summarize in three or more parts giving detailed examples in abstract format. Make sure you thoroughly read article and give multiple examples from all parts of the reading material. Budgeting OVERVIEW Business Owners Review Actual Expenses against Projections Budgets are essential tools that help small businesses develop their saving and spending plans. Properly prepared budgets also serve as a reference to determine how well funds are managed by allowing business owners to compare actual and budgeted revenues and expenses during a specific period. Revenue shortfalls or expense excesses can then be identified and corrective action taken to increase profitability. Budgets allow small businesses to better utilize financial resources and operate within their means by defining exactly how funds should be spent in every area and department of the company. Budgeting helps enterprises forecast where funds should be allocated and assists organizations in spending less money than they earn. Businesses use budgeting to control finances and evaluate progress and... Budgets are essential tools that help small businesses develop their saving and spending plans. Properly prepared budgets also serve as a reference to determine how well funds are managed by allowing business owners to compare actual and budgeted revenues and expenses during a specific period. Revenue shortfalls or expense excesses can then be identified and corrective action taken to increase profitability. PURPOSE Budgets allow small businesses to better utilize financial resources and operate within their means by defining exactly how funds should be spent in every area and department of the company. Budgeting helps enterprises forecast where funds should be allocated and assists organizations in spending less money than they earn. Businesses use budgeting to control finances and evaluate progress and profitability. This can help companies identify areas where they need to decrease or increase spending. Overall, budgets help business owners avoid going into debt and better prepare them for unforeseen expenditures. DEVELOPING A BUDGET To implement a budget successfully, a business should set financial goals, plan categories, maintain meticulous financial records, and balance and adjust the financial plan as needed. This can be complex and include every financial detail for a company, or it can be general and contain just a basic financial overview. It is up to business owners to decide which type of budget will work best for a particular venture. Budgets should revolve around estimates of revenue and expenses. Categories should include fixed expenses (rent, loan payments) and variable expenses (utilities, supplies, wages) as well as estimates that allow for unexpected expenditures. When creating a budget, business owners should create pro forma financial statements. These compare estimated financial figures from before a budgeting period with actual figures at the end of the period. The three primary types of financial statements are a balance sheet, income statement, and statement of cash flow. Balance sheets show assets owned, liabilities owed, and owner's equity. Income statements detail profit and loss for a specific period. Statements of cash flow detail where cash came from and where it was spent. By comparing pro forma financial statements to end-of-period records, companies can judge whether budgets are in line with estimates. At the end of every month, business owners should revisit their budgets to determine if the business has experienced a variance, which is the difference between forecasted and actual figures. A quantity variance is due to an increase or decrease in the quantity of the resource used. A cost variance is due to a difference in the cost of a resource. Variances help small businesses identify, adjust, and plan for potential problems with finances and allow them to set future budgets to account for potential gaps. This helps companies track finances and avoid accumulating debt. In addition, budgets should be flexible, allowing accountability for unexpected expenses