Operating budget

This budget focuses on the budgeted income statement and its supporting components and schedules:
Sales and collecting budget representing one of the first steps in the budgeting process, as items such as inventory levels and operating expenses are driven off of the sales and collections budget. Effective sales budgeting is a key factor in building a useful and representative financial model for a business. Regardless of the nature of your business (for example, whether it is product or service- based).
Cost of goods and services sold budget breaks down, the components of a business´s cost of goods ad services sold (in some cases referred to as the cost of revenues).
Inventory and purchases budget represents what a business plans to buy and how much inventory it intends to hold over a given timeframe, is based on three factors: a business´s desired ending inventory, cost of goods sold, and beginning inventory. A business´s desired ending inventory will drive that business´ budgeted purchases over a given period of time. A larger desired ending inventory will typically lead to a larger purchases budget and vice-versa.
Operating expenses budget forecasts all of the elements of a business´ operating expenses, such as salaries, rent, depreciation, and others. Some of these expenses are fixed and some are variable While the operating expenses budget represents an estimate of future expenses, this is an accrual- based accounting figure, and it is the disbursements for operating expenses budget, a component of the operating expenses budget, that drives a company´s cash flows.