What is Flexible Budget?

A definition of Flexible Budget

“A flexible budget is a financial plan that varies with changes in output or revenue levels. It adapts to changes in activity levels, allowing businesses to manage their expenses more effectively.”

Flexible Budget in Business Glossary - What is a Flexible Budget?

Business Glossary > What is Flexible Budget?


Examples of Flexible Budget in a Sentence:

The finance department created a flexible budget to adapt to changing sales.

A flexible budget helps companies manage unpredictable costs effectively.

Our company relies on a flexible budget for better financial planning.

Why is Flexible Budget Important in Business?

A flexible budget is important because it allows businesses to adjust their financial plans based on real performance and changing circumstances. This adaptability helps businesses manage resources effectively and achieve financial stability.

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Associated Terms

Here are some associated business terms and synonyms for “Flexible Budget”:

  • Variable Budget
  • Adjusted Budget
  • Dynamic Budget

Caterpillar’s Flexible Budget

Caterpillar implements a flexible budget to adapt to fluctuating market demands and production volumes. By adjusting their financial forecast based on activity level changes, they effectively manage costs and optimize profit margins.

Final Notes on Flexible Budget

When implementing a flexible budget, companies should consider the nature of their expenses and how they correlate with changes in production levels.

This approach allows for more responsive and accurate financial management, promoting efficiency and cost control.


This has been a definition of Flexible Budget meaning.

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