Posted by bripat42 on 1/19/2021 1:37:00 PM (view original):
Quote post by tufft on 1/19/2021 12:30:00 PM:
When a business moves money from the IT Budget to the Marketing Budget, or a family moves money from the Vacation Budget to the Home Improvement Budget, neither first destroys 1/2 their money.
There should be no penalty when moving money from once budget to another.
Budgets are a guess. Period. I've always assumed the 20-something year olds who coded the first version of HBD didn't have much life experience and probably didn't understand this. I know 40 year olds who don't understand this.
This is complete nonsense, and I'll give you a real-world example:
I used to work as a publisher for a daily newspaper. Our press room had a budget for our print jobs just as our newsroom had a budget for its work. A large expense for the press room was buying newsprint, which often was done on contract with bulk deliveries done far in advance. We bought newsprint when prices were low and stored it, so it was not uncommon to spend a disproportionate amount during any given quarter. Now, as the publisher, if I decide I want to shift money from the press room to the newsroom to, say, hire additional reporters and photographers, I might run into a problem if the money already is committed to newsprint being bought on contract or already purchased and stored. Backing out of a contract would incur a penalty, and if I've already purchased and stored newsprint, no problem, I can just sell the excess newsprint to another facility, but, uh-oh, the price has gone down again, and it's a buyers' market, so to get the money I need from the print facility budget to cover my unexpected newsroom expenses means taking a bath on newsprint we've already purchased.
Now, I've oversimplified this all quite a bit, but the bottom line is that shifting priorities in the middle of a fiscal year is not nearly as easy and cost-free in real life as you seem to think it is. Nor should it be easy and cost-free in HBD.
You and I are saying the same thing.
Once money has been Committed, i.e. contracts signed, like to buy newsprint or to pay scouts, it can’t be moved.
In business, a Committed amount and a Budgeted amount mean different things.
When money is Budgeted, and not yet Committed, it can be moved freely with no penalty.
The programming wizards who created HBD probably didn’t understand the difference.