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An operating budget is a combination of known expenses, expected future costs, and forecasted income over the course of a year. Operating budgetsare completed in advance of the accounting period, which is why they require estimated expenses and revenues.

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Operating budget is a statment of estimated income expenses on the basis of past experience for future period. It is combination of known expenses, expected future costs, and forecasted income over the course of a year. Operating budgets are completed in advance of the accounting period, which is why they require estimated expenses and revenues.

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The finacial manager calculate the Operating budget for a business in a very careful manner which is meant for managing day-to-day expenses. This is a short term budgeting strategiy and the fund ensures that the business operation is continued without any interruption due to lack of fund. You can think of Working Capital of any Business.

Taking an example, Think of a Restaurant Food Business. Every Day, the operation manager has to buy Vegetables,Groceries and other items.Then Salary of Employees, Utility Bills. and Others if any. However purchasing behaviour differs from one restautant to other. So for running this business, you need some working capital on daily basis,even monthly basis.

So one need to findout the operating expenditure,while doing the budgeting part for any project or any business. This Operating Budgeting is one of Budgeting Startegies,which focus on operating expenditure of any business.

 

 

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