Manage the timing of the budget is one thing. Keeping control of the budget, is another.
Well I think there are some of you who are ready to squeal, “precisely at home it always goes wrong! Impossible to control what * $ #! @ Budget! “. Needless to whine, it has nothing to do with control. It’s just a matter of discipline. Discipline, it is rather a part of education and psychology. We’ll talk about in due course.
I’ll take a simple comparison to explain what I’m talking about.
Say we have a private jet. In order to fly it, there is stuff that it runs on.
First, it has wings, wheels, engines, etc. These are the elements that can fly the plane. Then there is kerosene. Without fuel, one suspects, the plane will not move. And finally there are the flight instruments. These are the indicators that show everything that is happening: how high you are, how fast you are, etc.
Applied to a budget, this picture becomes clear. The elements of the budget are the different categories of revenue and expenditure, the columns representing the months, the addition and subtraction within it. Only one of these elements disappears or fails and the budget is in trouble. It becomes impossible to control. And finally the flight instruments – “indicators” – these are all little red and green lights flashing: the balance forward, losses, profits, debit, credit, balance, etc.
So to keep control of the budget, it’s pretty simple. You should know how to use it and follow certain rules (see the 5 golden rules of budget). If you behave like a good driver, everything works fine. Then it’s pretty relaxing. We can even put the budget on automatic pilot – if desired.
So far so good, controlling a budget in of itself is not rocket science. But you still have to keep an eye on things. For example, never will an airplane pilot go right into a hurricane (or if they do that is crazy). When it comes to a budget it’s the same. The budget, as a plane passes through areas which are continually changing: good weather, bad weather, storm, fog, etc. Therefore what’s required at certain attitudes is to keep control of the budget in any circumstances.