Nine Ways to Budget Strategically to Stay on Course

7. Match your accounting reports to key management items: It's called chart of accounts, and what it means is setting up categories that match control and responsibility, and the information you can manage later on. Accounting is going to be very detailed, but budgeting and budget management need summaries of categories and more aggregation.

• Set up your budget so you can see strategic priorities. For example, in my company we needed to view sales by product and by channel, so we built the chart of accounts to categorize sales by product and channel. I worked with a coffee shop that needed to see sales broken into general categories such as drinks, food items and accessories. If that's what you need to manage, then set up your bookkeeping to show it.

• As another example, break expenses into areas of control, like who's responsible, rather than type of expense. We have travel broken into upper management travel, sales travel, marketing travel and product development travel, because we want visibility for the specific people in charge of sales, marketing and product development. And that's a company with 40 people, not 4,000.

8. Consistency matters, regardless of tools: Do as I say, not as I've done. Some years we keep switching categories in the budget, trying to get better visibility. Those years we typically have less information because we can't go back to the past. When we stick to our categories over time, it's easier to see trends.

9. Do the above. You'll be glad you did: Good budgeting brings your words and your numbers together. This is what you need to control and steer your company toward the future you want. The alternative is haphazardly reacting to events -- essentially drifting. Good budgeting lets you control your destiny. Make no mistake: Budgeting is one of the keys to management.