It is the valuation of incomes and expenses (collections and payments) that will be produced during the development of an activity or group of activities and a plan of operations based on such an estimate need to carry them out.

In the public field, budgets try to organize incomes and expenses in the different areas or items (health, education, security, etc.). budgets help to control the different expenses because if there are deviations, you may want know why they occurred and how much. They also help to follow a certain plan. budgets follow a chronology of events to be approved in the end.

Normally, before the end of the year, budgets are taken to government chambers to get to a consensus and its posterior approval; and therefore planning incomes and expenses for the next year. As a result, budgets can be:

  • Balanced: when the expenses are the same as incomes
  • Deficit: when expenses are higher than incomes
  • Surplus: when incomes are higher than expenses