This section is from the book "Business Finance", by William Henry Lough. Also available from Amazon: Business Finance, A Practical Study of Financial Management in Private Business Concerns.
The objections above cited are all based on the assumption that a budget once adopted is an absolutely inflexible and unchangeable strait-jacket from which no relief can be obtained until after the expiration of the fiscal year in which it holds good. If this were actually the state of affairs, the objections would have weight. But the efficient budget, as used by some corporations, is subject to continual revision.
First of all, it is made both on a yearly basis and on a monthly basis. The yearly budget enters into few details, but gives a comprehensive view of the anticipated income from various sources - the anticipated expenditures, together with the approximate result of the whole year's business.
Supplementing the yearly budget and controlled by it, are the monthly budgets, which enter into as much detail as may be required by the nature of the business, and make due allowances, so far as they can be foreseen, for the seasonal and month-by-month fluctuations which occur in every business. The month-by-month budget may be checked up at the end of each month against the actual results of that month; the causes of discrepancies may be noted; new contracts or prospects for enlarging or reducing business during the months immediately following, may be taken into consideration. With all these and other similar factors in full view, such revisions as are at the time required may readily be agreed upon.