A budget is a useful tool to keep spending under control. Every good organization uses this tool to keep an eye on its activities. After allocating a budget to an account, it is compared to the actual expenditure to make sure there is no overspend of money. In the initial year, budgets are allocated manually because of the absence of historical data. In subsequent years, you have two options to define budgets: you can reuse last year’s budget or allocate last year’s actual spend to act as the current year’s budget.