What is the purpose of budgeting?
A budget should help manage limited resources. Allocating land, labor and cash can be entailed when doing a budget. Budgeting coordinates resources, production and expenditures. It helps you predict the outcomes of an adjustment before you act or change an action. The usefulness of a budget depends on accuracy of information. How you answer a question could influence the profits of the farm. Should I replace or sell a tractor? What crops will be profitable? Tear down a barn or build a new one? Buy or rent additional land? Buy equipment or hire a custom operator?