BUDGET 3  - DEVELOPING YOUR PURCHASE BUDGET

After the Sales Budget has been developed, the next step is to "Develop Your Purchase Budget". The Purchase Budget determines the number of units or products you will need to purchase each month, how much these purchases will cost you each month, when these purchase will be paid, and how much you will owe your supplier at the end of each forecasted business year (IE year end).

In other words, the Purchase Budget consists of Four Parts. They are as follows;

Part 1    Determine the # of Units or Products to Purchase Each Month
Part 2    Determine How Much Your Monthly Purchases Will Cost
Part 3    Determine When You Will Pay For The Purchases
Part 4    Determine Your Forecasted Accounts Payable on Purchases