Budget questions. (wordy)

[Chris Shoemaker]

Hmm... that's funny.  What you call an "expense" budget is *exactly*
how I budget, too, but I've been calling it a "cash budget".  My
source for that usage is an accounting textbook that has a whole
chapter for cash budgeting another for capital budgeting.  I think its
definitions were chosen to contrast those two.  But, some googling
shows your use of "expense budget" and "cash budget" are commonplace.
I think I'll start calling it "expense budgeting", because, I must
say, that term does make more sense to me.

Anyway, these two are much more similar than either is to capital
budgeting.

On Wed, Nov 09, 2005 at 02:37:46PM -0800, Thomas Bushnell BSG wrote:
> My expense budget simply counts all the expense accounts in my
> bookkeeping; it is convenient to use exactly the same budgeting
> categories as I have expense accounts.  More complicated organizations
> do not normally treat budgeting categories and accounts so closely.

I informally polled a few professional accountants on this question,
and the consensus was that they generally *do* try to keep budgeting
categories as close as possible to expense accounts, down to a certain
level of detail.  When there's a difference it's usually just that the
expense accounts are more specific than the budget categories.

> The cash budget is then a different beast.  I could do it ground up,
> but instead it cribs figures from the expense budget.  This works well
> because I am a simple case.  So I consider annual cash credits and
> debits.  My cash debits are my total income plus any loans I plan to
> take out.  (Strictly speaking, if I receive income which is
> noncashable, and I don't expend it that year [a starbucks card, which
> I receive as a gift on Dec. 25, for example], I should also subtract
> from cash debits, but the amount of these are negligible in my case.)
> My cash credits are my expenses, minus those expenses which are not
> paid from cash assets (for example, depreciation on the car,
> capitalized student load interest, and so forth), plus additional cash
> payments (debt retirement, asset transfers).

Your description of "cash budgeting" sounds like you're summing all
cash debits and credits into one number for each period.  That seems
like generating a periodic projected cash-flow report, yes?  If you
make budget entries for all your income, expense, liability and cash
assets, wouldn't you get this number by summing the column for each
period?

A "total" row and column are something that I want to eventually add
to the budget report.  As it is, I still end up exporting the budget
report to html and beautifying it and adding summations, but it'd be
nice to see the summations before exporting.

-chris