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A master budget is a collection of specific budgets and schedules that show the business's financial and operational goals for a future accounting period. The operating budget, capital budget, and pro forma financial statements are typically included in the master budget.
What is a master Budget?
A comprehensive document that contains numerous smaller budgets is referred to as a "master budget." It combines all of these different budget templates into a single master template. A master budget will provide an overview of revenue and expenditures as well as all the specifics of the company's income-producing activities as they relate to the operating budget. A projection of what would appear on the balance sheet at the conclusion of the accounting period will also be included, along with cash inflows and outflows from the cash flow statement.
In order to cover the entire fiscal year, master budgets are created as part of small business accounting, typically on a monthly or quarterly basis. Using a technique known as continuous budgeting, businesses may add extra months to the end of the budget to keep it moving forward.
The master budget displays a financing strategy and a cash flow prediction in addition to the financial statements that were budgeted. A statement of purpose may be included by certain companies to describe how the master budget fits into their long-term financial objectives. The document has a lot of leeway because management of the organization uses it to make planning decisions. This document is maintained by the budget director, who receives input from many departments and staff.
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