" There are many free and shareware bookkeeping software around and they are easier to use and understand than complicated finance software such as Microsoft Money and Quicken. Finance software lets you track all your check writing by category and makes monthly comparisons of your actual spending to the amount you've budgeted. If you think you're responsible enough to use it in emergency situation, then leave one for those times. Buying a Gucci dress for a hot date isn't an emergency situation. Paying for school tuition fee or electric bills is a right example of emergency situation. Only fools keep more than one credit card. By using budgeting software, you can track your income and outcome. Credit cards make it easy to spend on impulse but by using a good program, you can reduce your expenditures because you can analyze your financial situation with ease. Budgeting software provides you with income statement, balance sheets, cash flow and other budgeting requirements to your computer. Zero based budgeting is especially recommended for government budgets because expenses can easily run out of control it if is automatically assumed what was spent last year must be spent this year. This means that what has been already spent is not automatically sanctioned. Past expenditures may serve as guide to but not to justify for future outlays. The Australian National Audit Office has identified the advantages of activity based budgeting: The Advantages - Output costs are supported by a schedule of costed activities - Opportunities to examine work processes - Identifies non value-adding activities that can be eliminated - Basis of a performance measurement system and direct link between strategic goals and operational realities - Enables cost profiles to be managed - Accurate costing data for operational management - Costs are transparent, understandable and actionable Disadvantages - Activity definition may become too detailed and the model may become too complex and difficult to maintain - Underestimation of the task of collecting activity driver data - Implementation may be considered a financial management fad and there is insufficient commitment from operational managers Activity Based Budgeting Disadvantages - Usually requires buying Activity Based Budgeting software - Requires training of all managers including budgeting department - Requires people to really understand what drives their budget - Eliminates excuse that activity volume changed because it makes visible volume changes - Requires everyone to collect or estimate activity volume By understanding how resources are transformed into products or services, and byfocusing on the cost of activities, activity based budgeting helps an organisation to obtain a greaterunderstanding of how costs behave in their organization and which activities create significant amounts of cost. Far too often small business gain good profits, but they do not have enough operating capital to meet their needs. Consequently, they may be forced to sell out to a stronger competitor or close the door and put the company out of business. But with budgeting and forecasting, this small business will be slowly on its way to becoming big and strong enough to withstand the demands of the competitors and the entire market in general.