This budget is created from the first year of the business plan. When the long-term business plan is made, it's usually forecasted by year for five years.The first year of the long-term plan is forecasted by month, and this then becomes the budget for the next year.
The business plan is usually not too far from the start of the new-year, so the first year of the plan should have fairly recent projections. Even so, things change and the first year of the plan may not be totally accurate as the new year goes on. Most companies will not change these numbers though. They will analyze what the changes are, and report these changes each month as part of the month-end closing routine.
The report will contain the income statement and balance sheet by month. Sales dollars and volumes will be detailed by platform. The underlying detail of the sales and volumes by part number are not part of the report, but that detail was used to get the numbers for the report, and the accounting group will need this detail to perform an analysis between actual and budgeted amounts.
Direct costs associated with the sales are also part of the new year numbers, as well as costs by department that are used to guide the operations of the company. Each department manager is responsible to explain any variances that happen each month between actual amounts and the amounts they are responsible for.
Any new capital projects are also listed with start dates and costs. The amounts for the projects are figured into the financial statements. This includes expenses, depreciation and the cost of any additional employees. Capital and other projects are a large part of planning each year. Many times the success of the company will depend on timely completion of these projects for new revenue, or to maintain the current revenue. A summary of the projects and the timing of these projects are included. The detail of these projects should be available and ready to use by the engineering and other staff.
Cost savings initiative projects are also included. Many companies include something similar to a cost savings roadmap. This roadmap is similar to what is done with capital projects. A start time is decided, as well as who is responsible for the project and how much the project will save. Of course, the details are not fully explained, but are available. A periodic follow up by leadership should be done to be certain that all projects are going to plan.