39+ SAMPLE Corporate Budget

What Is a Corporate Budget?

A corporate budget is a document that details a comprehensive estimation of the possible business expenses and revenues within a particular fiscal period. Each corporate budget deals with and includes income guidance and expense estimations. The information comes from previous corporate budgets dealing with revenue and expenditure with necessary adjustments for the future. Constructing any budget plan for a company is a top priority for the finance department since every business needs a budget to manage daily operations. In the present setup, business or corporate budgeting is in the hands of the corporate performance management (CPM) team. CPM is a business approach that deals with planning, budgeting, and forecasting different business activities and functions, linking it to organizational strategies and techniques to its business plans. Afterward, the CPM also monitors the execution of these plans. Modern developments in software allow CPM teams to develop corporate budgets with great accuracy and confidence. Enterprise resource planning (ERP) systems use the applications to integrate budget plans complete with real-time performance monitoring that allows the company to forecast budgets with greater accuracy and visibility, following the flow of money coming in and out of the organization.

According to a statistical study from Clutch, out of the 335 small businesses in the study, half of these companies did not create an official and formally documented record of the company budget in 2020. It speaks volumes as many businesses do not see the significant impact of writing a business budget for their operations.

Components of a Corporate Budget

When creating a corporate budget, there are different things to consider. Remember that the principal goal of the corporate budget is to indicate business expenses and profit for an entire fiscal period, and it must show accuracy as much as possible. A company that has a corporate budget sets itself up to align monetary needs to events or projects that the business needs to achieve its short and long-term goals. The following section identifies the necessary components that a corporate budget must have to ensure the continuity of business operations towards success.

Estimated revenue: The section details the amount the company expects to gain from rendering products or services to customers. It describes all the cash that comes into the organization, regardless of how much the company spends to get its revenue pouring in. The estimated revenue section is the first part of the corporate budget. The numbers the company indicates in the budget come from the previous fiscal year. If a company is a startup, it originates from industry averages.Fixed costs: The fixed costs section contains the regular and consistent expenses the company incurs without change according to how much the company makes. The items in the fixed costs section of the budget include rental space, insurance payments, utilities, bank fees, legal services, accounting, employee salary, and equipment leases. It is necessary to indicate these costs for the company to set aside finances to cover these expenses. It also serves as a reference point to check on business financing problems.Variable costs: Variable costs vary depending on the production or sales volume of the company, closely related to the cost of goods and services sold. The value fluctuates according to business success. These costs have something to do with the production and purchase of a product that a business sells. Variable costs consist of raw materials, inventory, production costs, shipping fees, packaging, and delivery expenses. Variable costs also cover sales commissions, credit card fees, and travel expenses. The budget plan covers the probably expenses for them. Employee salaries fall under fixed and variable costs, depending on the work of the individuals. The in-house and office staff salaries are under fixed costs, while people working manufacturing and production are under variable costs.One-off costs: One-off costs or one-time expenses are fees that fall outside the usual work that the company does. These expenses are commonly startup costs related to the business, including moving offices, buying required equipment, purchasing computer software, and acquiring necessary furniture. One-time expenses also include incurred costs for research and product launches. Since it is difficult to predict these types of expenses, it is advisable to set aside some cash in case of emergencies.Cash flow: Cash flow statements represent the money that is actively coming in and out of a company. A positive cash flow means that more income or revenue comes into the business than incurred expenses at a given fiscal period. To get an accurate picture of the company’s cash flow, look for previous financial records and statements and use the information as a means to forecast future earnings for the business for the current financial year. There must be scrutiny in looking at how much money is coming into the business and when it usually happens. If the company has a peak season and dry season, it helps to identify the dates where cash flow is at its highest as it can help the company to invest more and increase purchases during this period.Profit: Profit is what the business brings in after deducting all other costs from the revenue. Even a subtle increase in profit suggests that the company is growing. In this section of the corporate budget, the company creates a plan on how much they are planning to make according to the estimated revenue, costs, expenses, and sold goods and services. If the accounting unit monitors significant and unplanned changes to the profit margin, the company must reconsider and recalibrate the cost of goods or services it sells and consider a price adjustment or price increase. It also helps to consider taking advantage of implementing marketing and advertising plans to increase sales.

How To Write a Corporate Budget

Working on corporate budgets or budgets, in general, require companies to look back on previous budget statements and records about income and expenses. Many businesses find it easier to create these budgets if they have been serving for a long time as they have accurate information to look back on in creating a more accurate budget. For startup businesses, market research on the typical costs in the industry and or area to gather budget estimates is the way to go. The section below helps you create a corporate budget for your company.

  • 1. Examine the Company’s Revenue

    The first step to any budgeting process is to look back on previous years and identify all income sources. Combine all of the revenue data you have to discover where the money comes from every month. For an accurate representation of the company income, calculate for revenue and not profit. After identifying all the possible income supplies for the company, compute the monthly income by using the information you have from the previous fiscal year. Through analyzing the monthly income, you can determine the peak seasons when the company performs. Knowing about the seasonal changes allows the company to make the necessary preparations in terms of the corporate budget.

  • 2. Deduct the Fixed Costs

    The next step to creating the corporate budget is to add all the fixed costs. Fixed costs are the expenses that are recurring to ensure that the daily operation remains uncompromised. These costs occur daily, weekly, monthly, quarterly, or annually, and knowing what they are can become advantageous to writing the budget. Fixed costs include rent payments, debt repayments, employee payroll, asset depreciation, taxes, and insurance. Different businesses have various fixed costs, so it is critical to take note of all of them.

  • 3. Identify the Variable Expenses

    Variable expenses are changing costs depending on the goods and services that the company offers its customers. Many of these expenses guarantee that the company continues its daily tasks and business operations. Variable costs also include those that are unrelated to business functionality. Discretionary expenses, like seminars and training programs, increase business profitability. Other examples of variable costs include office supplies, marketing costs, and utilities. During dry seasons, companies must be wary of their variable expenses and take advantage of discretionary activities during peak seasons.

  • 4. Prepare Contingency Funds For Unexpected Expenses

    Whether you own a business for a long or short period, one-time expenses always come at the most inconvenient times. Prevent the worry of incurring unexpected expenses when you incorporate and assign extra cash in the budgeting process along with contingency planning within the budget. It is convenient to have emergency funding, making the company ready to replace or issue newer equipment and other office necessities whenever necessary. Writing for these unexpected expenses helps the company save time and money worrying about where to get funding.

  • 5. Create a Profit and Loss Statement

    After collecting the necessary information and completing the steps above, you can create a profit and loss statement. The profit and loss statement just asks you to add and subtract the income and expenses for a specific period. If the results return positive, then the company has a profitable month. If not, there is a loss that the company needs to get back in the following months to come. Losses are not something to lose hope over. There are times when months are just unprofitable. As such, you can make the necessary adjustments for the next month to recover.

  • 6. Develop an Outline for the Corporate Budget in a Positive Light

    Projecting what happens in the following years comes from experience, and the more experienced an individual is, the more accurate these predictions happen. The business can create a future-focused corporate budget by using the profit and loss statement. Through the statement, you can better understand and predict the seasonal peaks and troughs of the business. Examining the profit and loss document provides sufficient explanations and information to the fluctuations happening in business profitability.


What are the three kinds of budgets?

There are three kinds of budgets in different sectors and industries. These include balanced budgets, deficit budgets, and surplus budgets.

Why is corporate budgeting necessary for companies?

Through realistic and accurate budgets, the business can strive to reach its short-term and long-term goals. The budget provides essential information to operate the business according to the means of the company while managing unexpected challenges and gaining profit.

How to manage a corporate budget?

There are different ways that an organization can manage its corporate budget. It includes:

  • Setting the budget information appropriately and accurately
  • Delegating expenses effectively
  • Collaborating with different departments
  • Standardizing budget reports
  • Collecting complete and accurate monetary values
  • Choosing an easily navigable budgeting software
  • Updating budgets on schedule
  • Keep looking onwards

Writing a corporate budget for a starting company is always a daunting task. However, with practice, experience, and research, the company can create an accurate and valuable document that ensures continuous operations with minimal hiccups along the way. Building a budget helps a company track its income and expenses, ensuring that there is a positive indication in terms of profit. Write a corporate budget for the company by using previous budget analysis and documents, and select and download from the 39+ SAMPLE Corporate Budget in PDF above. Get yours today, only at Sample.net.