Budget - Monthly or Yearly?

Mike or Penny Novack stepbystepfarm at mtdata.com
Mon Dec 29 16:07:32 EST 2014


>
>Choose a tool that looks like it will work for you and try it.
>
>David C
>  
>
THAT is the key point.

There are various purposes for budgets (and cash flow reports) and only 
some of these fit well with a double entry bookkeeping purpose. You need 
to keep that "purpose" firmly in mind when looking at what gnucash (or 
say QuickBooks) offers for budgeting.

Common with a business or organization is knowing whether ACTUAL income 
and expense accounts match the projected (for a business) or authorized 
(for an organization) budget. For example, the board of directors of a 
non-profit sets the BUDGET. There may be a problem if say the expenses 
in some category run higher than the budget specifies, not because not 
money in the bank to write more checks, but because not authorized to do 
so.

Similarly for household purposes, the budget represents a PLAN. You then 
find out whether you have been sticking to this plan by comparing with 
the actuals. But if it is more serious than that, if you must be 
PREVENTED from deviating from that plan, then one of those other "tools" 
(like the "envelope method") might be required.

In other words, the problem isn't that gnucash doesn't offer "budgeting" 
but that what it offers isn't the kind of budgeting you need to do.

Michael D Novack


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