The revenue section’s real job is to measure revenue projections—what the company thinks its going to earn through all its sources throughout the cycle of the budget—so that it may balance expenses against them. Unless there is a sound strategic reason for it, a business without a positive bottom line won’t likely be a business very long. Expenses may be higher than revenues in certain months, but the goal is always to make sure revenues exceed expenses by the end of the year.
When it comes to the expense side of a budget, the more detail that can be included within reason, the more accurate a view the budget will provide of the firm’s financial condition. More important, managers will be able to control cash flow better when they have a deeper level of information at their fingertips.