Have you used a budget for your household expenses? What about work? Have you ever gone through the budget process for your company or department? Yes, yes it is a fun process for one and all.
I worked for one company that had just finished their budget process and then an extraordinary expense occurred and the local manager did not want to allow the expenses to be covered since it was not in the budget. Basically they did not want to have to report the variance for the next 11 months or deal with the impact to their bonus. It eventually was paid for. But they did have to keep explaining the variance to the executive team throughout the year.
The purpose of the budget in my eyes is a rough guideline to how the system should be working. However there will always be deviations going both ways; there is no way to accurately predict the future perfectly. Even if the budget was carved in stone after its approval.
The true purpose of the budget is to track expenses to truly determine where money goes. With this knowledge you can budget, but better yet you can more effectively run your business.
For help with your budget process for home or work, give us a call and schedule a time to meet.