Professional Budget Planning Services in UAE

Budgeting is the process of estimating revenue, expenses, and capital requirements. Through this process, a business targets achieving a certain level of revenue and accordingly adjusts its expenses to plan for the expected business outcome. There could be several types of budgets implemented for a business in the United Arab Emirates (UAE) based on its needs, e.g. Capital budgeting that targets the capital requirements of the company.

Overview of Financial Planning in Business

The process of financial planning and budgeting services in the UAE essentially includes the following steps:

1- Baseline

Budgeting could either be for an existing company or for a new business or startup. For an existing company, current financials could be used as the baseline. However, companies can choose to go for a complete review of their business model. For these companies and the new business or startup, zero-based budgeting could be appropriate, which starts without any baseline, so each expense should be justified while the baseline requires justification for the incremental change.

2- Management Expectation

The next step is defining the management expectations and incorporating them into the budget. This step would involve determining how each item will move in the next period. The next period could either be for the full year or for the short term. Long-term planning could mean budgeting for multiple periods.

3. Revenue

It includes analysing how much increment is targeted for the next period. Breaking the revenue into products or services, regions, etc. are the activities that are likely to take place here.

4. Expenses

How much expense would need to be raised according to the revenue projection or where cost optimisation will need to be applied? This stage also includes recruitment and several key decisions.

5. Operational cash availability

While the above two factors, revenue and expenses, provide an overview of fundamental business results, there are a number of other factors that would influence cash. As an example, increasing the settlement period for the supplier would increase cash, while increasing the settlement period for the clients or customers would decrease. Similar decisions are considered here to arrive at operational cash availability.

6. Capital Requirement Funding

While the above-mentioned items give the expected result from business operations, the capital requirement stage helps to decide how much can be allocated to spend on fixed costs, e.g., buying machinery or capital assets. This stage also involves financing decisions, e.g., whether additional funding is required and how to meet it, e.g., a short-term arrangement like an overdraft or a long-term arrangement through capital raising.