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Two types of operating budgets you can use to control your company expenses

by , 28 August 2014
Running a company is expensive. And it's not even your big production costs that make it so. It's all those smaller operating costs that just add up and up and up.

Before you know it, your company can make a loss and all because of unruly operating costs. If this is the case in your company it's time to tame those expenses with a sound operating budget.

You can use either of these two operating budgets to get the job done...

 

Here's the first type of operating budget you can use to control operating expenses

 
Business operating budget: Your smaller business might have one operating budget for the entire organisation.
 
This is because your company has fewer expenses, which means you can condense all of them into one budget. 
 
You can determine if this is the right kind of budget for your company by examining each department's expenses. If the separate departments generate very few individual expenses, it's better to use a business operating budget.
 
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This is the second type of operating budget you can use

 
Departmental operating budget: Some businesses may have one operating budget for each department. For larger organisations, this budget will help you get a complete picture of what's happening inside your business.
 
To determine if this is the right budget for your company, examine the individual expenses each department generates.
 
If there are a lot of these expenses, it'll make more sense to have budgets for each department. You can then reconcile these into a larger overall budget as a way to track them.
 
By using either of these two types of operating budgets you can keep your company's operating expenses under control so they don't ruin your company's bottom line. 
 

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