According to QFinance dictionary, budget management refers to “the comparison of actual financial results with the estimated expenditures and revenues for the given time period of a budget and the taking of corrective action” (Para 1). It entails the process of formally identifying, approving and paying all costs or expenses incurred in a project or any other activity for which a budget is prepared (“The Project Budget”, Para.18). A budget on the other hand is “a quantitative statement, for a defined period of time, that may include planned revenues, expenses, assets, liabilities, and cash flows” (QFinance Dictionary). Budgets enable people to predict revenues and expenditures. This enables people and various organizations to measure the actual expenditure their business against the predicted expenditure in the budget. The budget becomes the focus of an individual or organization during spending as it helps to organize and direct activities as well as allocating resources. For an individual or a group of people to manage well a budget, they must have an intimate knowledge of the business the budget is addressing. Large deviations from the budget reflect either mismanagement of the budget or insufficient knowledge of the revenue and costs of equipment and services by the people involved in coming up with that budget. Without proper budget management, the managers may not achieve the purpose, goals and objectives of the budget. The process of budget management also refers to budget control. Budget management is important in enabling individuals, groups, organizations and governments to achieve their goals. Budget management ranges from the use of simple methods to the use of complex methods. Personal budgets may require the use of simple methods in management like the use of pen and paper to simple spreadsheets while complex budgets in big organizations may require complex computer programs to effect budget management. They may also employ other techniques like auditing, taking financial reports, control of operations or management by exception. In any of these cases, it is important to remember that a budget is a tool, which the management or individuals use to achieve their goals. They prepare budgets prior to the effective period and therefore “effective budget management requires thinking ahead, anticipating needs based on relatively predictable conditions” (Sennewald, pg 175). Budget management should be an organized activity and must, among other components, embrace planning and control of the all activities involved within the budget (Bryans, pg. 154). All the plans should be realistic and the managers or individuals should document them well. All activities should also be under control to ensure that there are no wide variations from the budget. Recording and reporting are also important components of budget management because they provide important information and data necessary to calculate deviations from the budget. There is a wide range of budget management strategies. It ranges from highly centralized budget management strategy to highly decentralized management strategy. In a highly centralized budget management strategy, the chief management officer is takes the responsibility of managing the budget and holds the budget managers responsible for carrying out expenditure as stipulated in the original budget. The main aim of the manager in