if expenditures go over budget, do you adjust the budget?
We have a VERY successful businessman who INSISTS that if we spend more on a given line item than the amount budgeted, we then MUST immediately increase the amount budgeted for that line item. (While the treasurer may well have to move more money into that "account," he insists that the amount we budgeted at the start of the year must also be increased.)
Why should we pretend that we budgeted correctly when we clearly didn't? And what happens if we planned to spend, say, $2,500 by the end of September, and $3,000 by the end December, but at the end of Sept. we have spent $2,800? If we increase the amount for Sept. by $300 AND the amount by end of Dec. by $300, then the year's budget is $3,300. But if we spend only another $100 during Oct. thru Dec., the year's expenditures totaled $2,900 - and the end-of-year results look like we "saved" $400 when all we "saved" was $100, compared to what we initially expected.
Plus, it then appears that no one has ever overspent his or her budgeted amount (unless you go back and find the original amount that we budgeted at the beginning of the year). At the very least, that would require looking at an “old” document (and finding the right page, the right line item, etc.) instead of looking at the next column on the one in your hand.