It’s March 1st. Do you know where your budget is? Hopefully it’s not collecting dust. Budgeting is a crucial part of the planning process but far too often I see companies spend a lot of time on budgeting at year end only to forget about it until the following year. Often times this is the result of a misunderstanding of the purpose and proper use of budgets. This article does a nice job of explaining how to effectively use a budget throughout the year.
“Your budget will be wrong; all budgets are: Budgeting means guessing the future–and it doesn’t have to be an accurate guess to be vital to management. If you don’t have a budget–even if it’s off–you can’t work with it to correct your course.
# The review process is absolutely critical: It isn’t the budget itself that makes the budgeting worthwhile. It’s the review that comes regularly, focusing on what’s different from the budget. That means comparing budgeted expenses to actual expenses.” Source: Budget Strategically to Stay on Course – Entrepreneur.com“
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