What Is a Budget Quarter?

A quarterly budget focuses on three months out of the business year.

The terms "budget quarter" and "quarterly budget" essentially describes the same thing. Both terms are used to describe a budget that covers three months out of an entire business year. The three month periods are often divided according to yearly quarters, such as January to March, April to June, July to September and October to December. Quarterly budgets are often collected every third month and may be added together to make an annual financial report.

Purpose

Quarterly budgets are designed to focus on how much a business is spending and earning within a given three month period. The purpose of this type of budget is to see how much the business is earning and spending per month, rather than on an annual basis. Usually, a company writes an annual report that discusses how much the business earns and spends during a 12-month period. The quarterly budget will provide details regarding earnings and spending every three months compared to once a year.

Sections

According to a quarterly budget example offered by Microsoft office, the main sections used in this type of budget will often have subcategories. Sale section examples include the total sales revenue brought into the company from the sale of product or services, the total cost of sales and the gross profit of the quarterly sales. A section will also be devoted to the company's variable expenses, such as fixed and flexible expenses during the three month period. The final lines of the quarterly budget will be devoted to total sums, interest payments, taxes and net values.

Uses

The quarterly budget is used to analyze the company's spending and earnings in a more detailed manner. This is particularly true for businesses that have made budget cuts or made budget arrangements and want to keep an eye on every aspect of the budget to ensure the new changes are working effectively and efficiently. The quarterly budget is not only used for analysis but also to identify any problems or issues there may with the budget and repair them as quickly as possible.

Quarterly vs. Annual Budget Report

The information presented in the quarterly budget report is the same information presented in the annual report. The main difference lies in the period of time each report covers. While the term budget report can be used to cover both, quarterly periods only cover a quarter of the year, so three months, compared to the 12 months covered in the annual report. Four quarterly reports from the same year are essentially added up and presented as an annual report for some companies.

References

• Microsoft Office: Quarterly Budget Analysis
• Brainmass: Quarterly Cash Budget