What is an Operating Budget?

An operating budget is a comprehensive estimate of an organization, company, or institution’s revenue and expenses over a specified period of time. This budget is usually prepared in advance as a goal or a plan of what to expect during the specified reporting period.

Operating budgets help companies and organizations achieve their financial goals. For example, as an HR manager, you can use it to assess your department’s performance by comparing the actual results to the operating budget.

The information obtained can help you decide:

• If the revenues are more or less as estimated
• Identify any unexpected expenses
• Whether the estimates need adjustments or not.