The budget should be prepared by the agent at the start of the year to list the estimated revenue from various sources and the expenditure necessary to obtain this revenue. During the year, the budget should be used regularly to measure actual performance, so that an early indication of possible problems that may adversely affect profitability can be obtained and timely remedial action taken. It is important for agents to prepare a cash flow budget to list cash inflows and outflows, enabling them to forecast when the agency may need additional financing.