Does a budget comprise expenses, and/or revenue?
Budget means both expenses and revenue. In quite a few cases, say personal finance, typically one refers to budget more from expenses point of view as the revenue is typically fixed/known [mostly salary].   The Operating budget and capital budget are laid out separately as Operating budget gives out day to day expenses that are typically essential, employee salaries, routine maintenance of infrastructure etc. The revenue is also tied in to match this. These are done within the same year. Where as capital budget is to build new infrastructure say a new bridge or other major expense that are done over period of years. The revenues to this are typically tied up differently and can even be linked to getting more funding from other agencies or loans.
It's the same result either way.  Say the bills are $600, and you are reimbursed $400. You'd be able to write off $400 as part of the utilities that are common expenses, but then claim the $400 as income.  I'd stick with that, and have contemporaneous records supporting all cash flow. You also can take 2/3 of any other maintenance costs that most homeowners can't. Like snow removal, lawn care, etc. So the budget is just a guess and the IT manager can ultimately spend whatever he wants?   Are you really arguing that he should treat the spending constraints given to him by the heads of the company as mere suggestions?   Do you actually work in an accounting department? I have to ask because you seem to have a fundemental misunderstanding about their role in all this. They are just score keepers, they don't get to decide how much money is allocated to each department. So the way they track the money has no bearing on this issue. In the US there is no set date. If all goes well there are multiple dates of importance. If it doesn't go well the budget process also may include continuing resolutions, shutdowns, and sequestrations. "What you are describing is a Chart of Accounts.  It's a structure used by accountants to categorise accounts into sub-categories below the standard Asset/Liability/Income/Expense structure. The actual categories used will vary widely between different people and different companies.  Every person and company is different, whilst you may be happy to have a single expense account called ""Lunch"", I may want lots of expense accounts to distinguish between all the different restaurants I eat at regularly.  Companies will often change their chart of accounts over time as they decide they want to capture more (or less) detail on where a particular type of Expense is really being spent. All of this makes any attempt to create a standard (in the strict sense) rather futile.  I have worked at a few places where discussions about how to structure the chart of accounts and what referencing scheme to use can be surprisingly heated!  You'll have to come up with your own system, but I can provide a few common recommendations: If you're looking for some simple examples to get started with, most personal finance software (e.g. GnuCash) will offer to create an example chart of accounts when you first start a session." Well, if you were a business, and your food and rent and travel expenses were business expenses, and you paid out less money than you earned, you *would* get a refund.  If you can prove that an expense is tax deductible, then that's just what it is.  For businesses, a net operating loss is tax deductible. Your chart and your claim don't match. You're looking at one marginal tax rate and saying that its historical change doesn't impact overall federal revenues. This is true on the surface, but you're only looking at one aspect of the overall picture.  Saying that federal revenue doesn't correlate with tax rates is disingenuous. An across the board cut or an across the board increase will both have significant effect. Likewise an increase to the top marginal tax rate by itself would have an impact as long as there were no corresponding cuts or increased expenditures to wipe out the impact.  A budget is a budget whether it's a great big one like the federal government's or a small one like a household budget.  Revenues and expenses need to match in order for the budget to balance. Increasing tax rates increases revenue from everyone within the affected tax bracket. It makes an impact. This chart is full of shit. Iraq War costs barely register a blip.   [From NYT article](http://www.nytimes.com/2009/02/20/us/politics/20budget.html)  *WASHINGTON — For his first annual budget next week, President Obama has banned four accounting gimmicks that President George W. Bush used to make deficit projections look smaller. The price of more honest bookkeeping: A budget that is $2.7 trillion deeper in the red over the next decade than it would otherwise appear, according to administration officials.* Expenses are where the catch is found.  Not all expenditures are considered expenses for tax purposes.  Good CPAs make a comfortable living untangling this sort of thing.  Advice for both of your family members' businesses...consult with a CPA before making big purchases.  They may need to adjust the way they buy, or the timing of it, or simply to set aside capital to pay the taxes for the profit used to purchase those items.  CPA can help find the best path.  That 10k in unallocated income can be used to redecorate your office, but there's still 3k in taxes due on it. Bottom Line:  Can't label business income as profit until the taxes have been paid. Fuck managerial accounting to death. Anywho, I'm not sure what they mean by the variance being higher or lower in the budget. Variance in principle is the discrepancy from a budget and actual.   I'll try to answer this from what I can see.    The budget variance in this problem is unfavorable for Busy Community Support, mostly caused by a significant underestimating of your salaries expense in the budget. However, we would also like to include on our budget the actual cost of the furniture when we buy it. That would be double-counting.  When it's time to buy the new kit, just pay for it directly from savings and then deduct that amount from the Furniture Cash asset that you'd been adding to every month. "Gnucash is first and foremost just a general ledger system. It tracks money in accounts, and lets you make transactions to transfer money between the accounts, but it has no inherent concept of things like taxes. This gives you a large amount of flexibility to organize your account hierarchy the way you want, but also means that it sometimes can take a while to figure out what account hierarchy you want. The idea is that you keep track of where you get money from (the Income accounts), what you have as a result (the Asset accounts), and then track what you spent the money on (the Expense accounts). It sounds like you primarily think of expenses as each being for a particular property, so I think you want to use that as the basis of your hierarchy. You probably want something like this (obviously I'm making up the specifics): Now, when running transaction reports or income/expense reports, you can filter to the accounts (and subaccounts) of each property to get a report specific to that property. You mention that you also sometimes want to run a report on ""all gas expenses, regardless of property"", and that's a bit more annoying to do. You can run the report, and when selecting accounts you have to select all the Gas accounts individually. It sounds like you're really looking for a way to have each transaction classified in some kind of two-axis system, but the way a general ledger works is that it's just a tree, so you need to pick just one ""primary"" axis to organize your accounts by." "Gail Vaz-Oxlade from the television show Til Debt Do Us Part has a great interactive budget worksheet that helps you set up a ""jar"" or envelope system for each month based on your income and fixed expenses.  We have used this successfully in the past.  What we found most useful was, as others have said, writing everything down, keeping receipts, and thus being accountable and aware of our spending." Revenue does not equal income.  Income is, more or less, synonymous with profit. It is the amount of money earned after expenses.  A corporation is taxed on its revenue after its deductible expenses have been removed, the same as a person is.  It's kind of double taxation, but it's kind of the same argument as saying that payroll taxes in addition to income taxes are double taxation.  Also of note: taxes on dividends are lower than normal taxes because of this double taxation. "I'm reminded of a conversation I had regarding food. I used the word 'diet' and got pushback, as I meant it in sense of 'what one eats'. That's what a diet is, what you eat in an average week, month, year. That list has no hidden agenda unless you want it to. If your finances are in good shape, debt under control, savings growing, etc, a budget is more of an observation than a constraint. In the same way that my bookshelf tells you a lot about who I am, books on finance, math, my religion, along with some on English and humor, my budget will also tell you what my values are.  Edit - In a recent speech, regarding Joe Biden, Hillary Clinton said ""He has a saying: ‘Don’t tell me what you value. Show me your budget and I will tell you what you value.’ "" - nearly exactly my thoughts on this.  For the average person, a budget helps to reign in the areas where spending is too high. $500/mo eating out? For the couple hacking away at $30k in credit card debt, that would be an obvious place to cut back. If this brings you happiness, there's little reason to cut back. The budget becomes a reflection of your priorities, and if, at some point in the future, you need to cut back, you'll have a good understanding of where the money is going." "I pay taxes on revenue.  You do have the ability to deduct expenses, though it's not as comprehensive as what companies can do: These figures apply to everybody, so those that earn more get taxed more on thee additional income in each bracket (meaning the first $100,000 of taxable income is taxed the same for everybody at one rate, the next $100,000 at a different rate, etc.) So you do get to deduct personal expenses and get taxed on ""profit"" - but since the vast majority of people don't keep detailed records of what they spend, it's much simpler just to use blanket deduction amounts for everyone. Companies have much more detailed systems in place to track and categorize expenses, so it's easier to just tax on net profit. Plus, the corporate tax rate is much higher than the average individual tax rate - would you trade more deductions for a higher tax rate?"